The market has tried to move higher all week. It has opened with a bang each day and prices gradually retrace throughout the day. This is a sign of exhaustion and the market needs to rest. Unfortunately, the longer we wait, the closer we get to some speed bumps.
All of the economic news has been excellent the last two weeks. This morning, the Unemployment Report showed that 143,000 new jobs were created in August. That was much lower than the 220,000 analysts were expecting. The S&P 500 was down seven points before the release. Traders were bracing themselves for a strong number and for a rise in interest rates. After the miss, the S&P futures rallied on the notion that the Fed has breathing room.
Personally, I don’t trust the government release. It is filled with adjustments. I do trust the ADP report. They actually process payrolls and they have their finger on the pulse of the labor market. The ADP report was strong.
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