Stocks Pause Despite Strong Jobs Data

S&P 500 (SPY)

The S&P 500 was flat this past week, despite solid jobs data. Additionally, the unemployment rate fell, and when I looked at the data, I was expecting to see a big move in the unemployed column. I was pleasantly surprised to see that number of employed workers rose dramatically, and the unemployment rate falling.

The futures were down about 1% recently, but managed to move higher following the jobs data. Still, the index was stuck below the trend line all day and still suggests a triangle pattern is forming in the index. If that is the case, we should continue to see back-and-forth trading over the next few weeks, essentially trading sideways. 

Dollar (DXY)

The dollar fell again. I really can’t think of a good reason for it to fall, though I read it is because of weaker growth going forward. However, yields should be falling much faster and they are not. It could just be foreign investors selling dollars due to the uncertainty around the turn of the election.

Gold (GLD)

Gold has been rising too, which could result from the dollar falling or it could be a move for safety. But it appears the metal is breaking out, and as long as the dollar stays weak and continues to fall, it is likely heading higher from here. 

AMD (AMD)

AMD had a good week, though I doubt it will last. There is no reason for it to last, after all. The company will be issuing billions of dollars worth of stock to buy Xilinx (XLNX), which will be dilutive to existing shareholders. Maybe the deal will create “value” and be accreditive to earnings, but it doesn’t mean that it will continue to do so.

AT&T (T)

AT&T keeps going lower and lower. The stock is kind of at that place of no return. If it drops below $26.10, it would have quite a distance to fall, basically erasing decades worth of value creation. It seems like every time Time Warner does a deal, it doesn’t work out very well. Remember AOL? Probably not. 

Roku (ROKU) 

Roku has a market cap of $30 billion.