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Global Market Wrap-Up - December 7, 2012

Friday, December 7, 2012
Mark Hanna
U.S. stocks finished mixed Friday as a "better than expected" jobs report failed to ignite the market. There were actually quite a few warts in the jobs data which we'll address next. For the day the S&P 500 gained 0.3% while the NASDAQ fell 0.4%. For the week the S&P 500 gained 0.1% while the NASDAQ fell 1.1%.
  • The official unemployment rate dropped to 7.7% but much of this was once again due to a shrinkage in the U.S. labor force. Recall, that if an unemployed person is not actively seeking work for 4 weeks they drop out of the labor force and are not considering unemployed. The labor force participation rate dropped 0.2%. The headline number read gains of 146,000 versus expectations of 80,000. Both September's and October's data was revised down, by 16,000 and 33,000 respectively. The average workweek was flat while wages gained 4 cents. Aside from the headline data 140,000 of the jobs created in the past three months, or 35%, were in retail - most likely seasonal. Hence many of those will disappear sometime early in 2013.
Aside from the labor data, consumer confidence came in much weaker than expected while credit usage came in above expectations, led once more by an upswing in student loans.
  • The Thomson Reuters/University of Michigan's preliminary reading of its index of consumer sentiment plunged to 74.5 in early December, the lowest level since August. It was far below November's figure of 82.7.
Oil prices fell 0.4% to $85.93 a barrel. Gold gained 0.2% to $1,705.50 while silver added 0.05% to $33.13.

British shares gained 0.2% while German shares fell by the same amount. French shares added 0.1%.
  • Germany's Bundesbank cut its growth forecasts and warned there was a risk of Europe's biggest economy dipping into recession in early 2013.
China capped off a strong week by gaining 1.6%, while Japan dropped 0.2%.