Futures tumble following disappointing November employment report. Futures were higher ahead of the jobs data with most preliminary reports pointing to a strong report. The major market indices had risen substantially on Wednesday and Thursday, but we could see some selling heading into the weekend. 

Nonfarm payrolls did see gains in November, but with only 39,000 jobs added, results were far below expectations. The ADP Employment report this week showed that private payrolls rose by 93,000, lifting hopes for the employment data. The private payrolls component of this report showed a gain of 50,000, which is also disappointing. The only positive in the release was a 21,000 upward revision to October’s figure to 172,000. 

Economists look at the average workweek for signs that businesses are preparing to hire. This is because a rise in the average workweek shows that businesses are getting all they can out of current employers. Unfortunately, the average workweek remained at 34.3 hours in November with average hours earnings flat when estimates were for a gain of 0.2 percent. The unemployment rate also disappointed, rising 2-tenths to 9.8 percent. This isn’t always a bad thing, since the unemployment rate does tend to rise ahead of payrolls growth thanks to an influx of job hunters.

The major market indices are still likely to close with gains this week after rallying sharply the past two sessions. The Dow (DJI) has used the 11,000 level as support and is likely to continue to do so. However, the bulls don’t want the Dow to move back to this level after making gains to 11,362 as of Thursday’s close. 

Former Fed President Alan Greenspan had interesting things to say about the economy. Mr. Greenspan told CNBC that monetary policy was working because it pushed stock prices higher. The general idea is that rising stock prices provide an optimistic atmosphere that result in spending by consumers and businesses alike. Unfortunately, this momentum is not flowing into hiring and this is a serious concern for the economy. 

Retail stocks could see some profit taking Friday following strong gains the past few sessions. Retailers benefited from initial strength in holiday shopping, which pushed the Retail HOLDRs (RTH) to $105.56 Thursday. However, thanks to the jobs data, we could see the largest gainers in the sector see profit taking Friday. 

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site