The Market isup seven points. Dow Jones was down 15 on Friday. It Traded in a large range — down 148 at worst and up 72 at best.

S&P 500 was unchanged.

Weak US jobs numbers at the headline but the participation rate fell — the number of people looking for work dropped off to the lowest level in 35 years. The quarterly run rate is down from 200,000 jobs a month to 140,000 a month. So although the headline unemployment rate fell to 7.3% the numbers weren’t that good and the jobs that were added were in lower paid areas of retail and food service. Non-farm payrolls (employment) were up 169,000 in August, just below forecasts centred for a 180,000 rise in job numbers. The July report was also revised down to 104,000 jobs rather than the original 162,000 increase. The jobless rate fell from 7.4% to a four-and-a-half year low of 7.3%.

The jobs numbers make tapering possible but it is now unlikely to be radical and may even be delayed beyond September until at least October … a small cut in asset purchases rather than a meaningful cut expected. Other numbers also suggest the Fed need not rush tapering. Consumer spending has flat-lined, housing numbers have lost their recovery trend and bond yields have racked up to over two year highs.

The Chinese trade surplus numbers were out at the weekend — generally positive — the trade balance was up from US$17.82 billion to US$28.61 billion in August. Exports were up 7.2% year on year with imports up 7.0%. Chinese inflation numbers today.

The A$ is over $92c on the Chinese trade numbers, a fall in the US dollar on the jobs numbers and on the election result — it usually has a post-election blip on the reduction in uncertainty.

Iron ore price fell $3 to $134.10. First big fall in a while.

The US bond market was up — 10 year yield down 7 basis points to 2.935%.

There is a G20 meeting in progress.

Obama says he will address the American people on Tuesday on Syria after the vote in Congress tonight.

BHP was up 0.54% in the US on Friday. The stock closed in the US up 12c on the close here yesterday. RIO down 0.23% in the US.

The oil price up 1.99% as the US Secretary of State continued to push for action against the Syrian use of chemical weapons whilst the Russians distanced themselves saying the evidence was not there and that it may have been the rebels trying to provoke international action against the regime.

European markets mostly up. France, Spain, Italy and Greece (the weaker economies) all up over 1% on hopes that the US jobs numbers will delay tapering.

The Japanese market was down 1.45% on Friday. The Chinese market was up 0.83%.

Metals up as the US$ fell on the US jobs numbers and on OK Japanese trade numbers.

US Economics on Friday:
Nonfarm Payrolls: Actual 169K, consensus 177K, prior 104K (from 162K).


  • Very quiet this morning — the positive impact of a clear election result is not apparent (it was fully discounted ahead of the weekend) and the focus goes to Syrian uncertainty and the US jobs numbers on Friday which saw 500,000 fall out of the job hunt. That makes tapering less likely but the market isn’t celebrating as it has (rather perversely) done on other weaker than expected economic releases.
  • Election — Consumer stocks expected to get a lift out of the weekend election result — it remains to be seen if a clear election result brings about a lift in consumer confidence and business spending. Ultimately the result was priced in already.
  • Infrastructure Sector expected to get a lift from an election and $20 billion worth of spending.
  • Tokyo winning the Olympics is expected to incur $45 billion of extra infrastructure spending with a lot of iron ore demand for Australia from Japan.
  • A$ up — The US dollar fell on Friday which has propelled the A$ over 92c which is a short term positive for equities. After the last five elections on the removal of uncertainty.
  • Iron ore price fell $3.
  • Gold up on the weaker US jobs numbers suggesting tapering is less likely (more inflationary money printing).
  • Today in Australia — Housing finance — Expected to be +2.0%. ANZ Job Ad numbers also out.
  • Australian jobs numbers on Thursday will feed into the RBA’s next meeting.
  • NAB Business survey tomorrow.
  • Chinese inflation numbers due out today. Industrial production, retail sales and loans due tomorrow.
  • Main US numbers this weekMon: Consumer credit. Wed: MBA Mortgage Index, wholesale inventories. Thurs: Weekly jobless claims, import/export prices. Fri: Retail sales, PPI, Mich Univ Consumer sentiment, business inventories.
  • NAB has overtaken AMP as Australia’s largest manager of corporate superannuation. Funds under management in their corporate super division was up 25.3% to $24.1 billion after winning a contract to manage the retirement savings of BHP Billiton Ltd staff which saw NAB jump over AMP who has $23.9 billion in managed funds.
  • Serena Williams won the US Open this morning.
  • A lot of stocks ex dividend today including MND, WOW, WTF, IVC, CSL, BXB, ARI. See the table at bottom of the newsletter for details.
  • Macmillan Shakespeare (MMS) down 5% this morning on the election result. Traders taking profits. We have a trade in the Trading Ideas section. We decided to hold over the result (doh).
  • NIB Holdings (NHF) may get a lift from the prospect of the coalition repealing the increase in medicare levy.
  • Silver Lake Resources (SLR) — $15 million share purchase plan announced this morning.
  • Beadell Resources (BDR) up 4% on results today.
  • Newcrest (NCM) up this morning on the gold price and their Financial Report emphasizing salary freezes and zero short term incentives.
  • ASX Limited (ASX) up this morning on the release of a presentation.
  • Warrnambool Cheese and Butter (WCB) unchanged on results.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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