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Stocks look to open lower as NonFarm Payrolls fell by 263,000 during the month of September helping to push the Unemployment Rate up 0.1% to 9.8% from 9.7%. The consensus estimate which had become more and more optimistic over the last couple of weeks was for losses of 180,000.
Now that the “panic recovery” in stocks which we define as the last leg down from October 2008 thru early March 2009 appears over, equity investors will need good news on the economic front to push stocks appreciably higher. Specifically, the labor market needs to improve which will in turn aid the housing market. This latest jobs report is not a step in the right direction.
What is an investor to do? We noted above that the jobs report was “not a step in the right direction” and therefore will not help push stock prices higher. However, we also believe that stocks will not move substantially lower and, at this time, would look to ADD to positions should they fall another five percent or so.
Regarding Fixed Income, we continue to like Government Agency Bonds, Short-Term Corporates, Municipal Bonds and Preferred Stocks.
Many happy returns of the day as Chris celebrates his birthday and to our parents as they celebrate their 55th Anniversary!