Strong NFP Send Stocks Higher

US markets jumped higher after the release of a stronger than expected non-farm payroll (NFP). The S&P ended a five session losing streak. The unemployment rate also fell to a five year low and consumer confidence swelled to a five month high.

The NFP was strong across the board as we are getting a four month average of around 200K new jobs added per month. We saw a print of 203K added in November with e unemployment rate falling to 7 percent. We had expected 180K new jobs and 7,2 percent for the unemployment rate.

STOCKS
The DJIA as well as the S&P ended five session long losing streaks. The DJIA spiked 1.3 percent to end the day at 16,020.20. The Dow was off 0.4 percent for the week. The S&P also saw a strong rally on Friday. The index jumped 1.12 percent as all 10 of its sectors saw gains. However, we ended its 9 week weekly win streak as the index slumped 0.4 percent ending the week at 1805.09.

The tech heavy Nasdaq Composite rose 29.36 points to finish the week at 4062.52. For the week, the composite was up a tiny fraction at 0.06 percent.

Asian markets are mostly higher this morning as good data from China bolstered the gains from the U.S. markets. The Nikkei is currently up 1.9 percent as the weakening yen is offsetting weak economic data. The benchmark has now hit a one week high as the USD/JPY is trading back around 103. It is now within sight of its six month low at 103.36.

The Shanghai Composite is flat around 2235 as China’s inflation slowed down. We received a reading of 3 percent for November, October’s number was at 3.2 percent. Before this release the Shanghai was above 2240 near a three month high. Over the weekend, November’s trade surplus came in at its strongest mark in nearly five years. China saw a jump in exports which helped widen the gap.

In India, the Sensex has hit a new record high at 21,483 and the Nifty rose to 6145. This is its highest level since January of 2008. In Thailand, the nation prime minister, Yingluck Shinawatra, has called for elections. Their benchmark, SET Index was up 0.6 percent.

CURRENCIES
The EUR/USD (1.3704) continues to push higher as we are targeting 1.38. That level should hold as we could see profit taking. The USD/JPY (102.994) is above 102 after we saw profit taking last week pushing it lower to 101.61. We remain bullish in this market.

The EUR/JPY (141.137) is testing resistance at its current level. We could expect profit taking near here as long as we trade around 143.20 to 140.90. The GBP/USD (1.6346) is butting heads at 1.644. We expect the Sterling will have trouble breaking above this level and we could see profit taking or consolidation for a while. The AUD/USD (0.9105) can go bullish if it manages to stay above 0.9030. If that occurs, we can target 0.9180.

COMMODITIES
Taking a look at metals today.

Gold (1228.60) is trading from 1210.95 up to 1245. If we break above 1245/1250 we could target 1290. Silver (19.51) is nice and steady. There is a small chance we could rise to 21.50. Copper (3.2685) remains in a sideways trading range from 3.10 up to 3.339.

Brent WTI (111.72) continues to push higher from 103. We are targeting 112.50. A break of that level targets 115.90 and 116.00

TODAY’S OUTLOOK
Investors worldwide will be digesting the NFP numbers as well as consumer confidence. The question being asked now, is all this data good enough for the U.S. Federal Reserve to begin rolling back its asset purchases in December? The way markets responded to the good data, could be an indication they are giving the Fed permission for a small taper of $5 to 7.5 billion at its December meeting. We will have to wait and see and listen to comments from the Fed this week.