The Dow closed off 20 to 19,171 on light volume while the NASDAQ rose slightly. For the week the Dow was up 0.12%. IBD said the recent rally is now under pressure and to proceed with caution.
The November jobs report came out today showing a drop in the unemployment rate to 4.6% and that 178,000 new jobs were created. The figures were better than estimates but the big fly in the ointment was the huge drop in the labor force participation rate which fell 446,000 over the past two months to an all-time low of 62.7%. Peter “Oddvar” Boockvar of The Lindsey Group, said there is rising frustration over why so many Americans are out of the work force. He cited the cause as boomers that are retiring plus people finding it easier to collect transfer and welfare payments rather than go back to work. He also cited a skills gap which leaves many high paying jobs unfilled. Economist Dan North on CNBC said that if the 95 million folks now on the sidelines were instead counted as part of the work force the unemployment rate would be 9.3%.
A referendum vote in Italy over changes to the constitution will be held on Sunday and polls currently show the measure failing. The thinking is that should the referendum go down in flames it could set Italy up for bank failures and a new round of elections potentially weakening the European Union. Stay tuned.
Oil prices continue to creep higher rising 1.1% to $51.65 per barrel for WTI crude oil. Gold traded higher by $6.29 an ounce to $1,179. Weighing on gold is a strong US dollar while troubles in Europe are supporting gold as an alternate currency. In the past week I have read and listened to two prominent people wax on the potential demise of the European Union and the euro currency itself within the next 5 years. One is money manager Jim Mellon, who called the Brexit vote a sideshow and the other is writer Noam Chomsky who said that European neo-liberalism is driving the EU’s demise. Hey Noam, Why don’t you tell us how you really feel?
Have a great weekend. The Boy Scouts will be selling Christmas Trees in Ballard this weekend.