Once again a disappointing jobs report issued on Friday sent stocks lower. The Dow Jones Industrial Average (chart) closed down 124.20 points, the Nasdaq (chart) -38.79 points, the S&P 500 (chart) -12.90 points and the Russell 2000 (chart) -10.29 points. Markets were lower on Friday due to the lack of job growth that continues to plague the economy. For the month of June, the private sector only added 80,000 jobs compared to the 90,000 jobs economists were expecting. Even if the 90,000 mark was met, I still believe equities would of sold off. This economy needs 200,000+ jobs added monthly in order to make a meaningful dent in the unemployment rate and to have a real effect on the economy.
Next week marks the beginning of the second quarter earnings reporting season. Aluminum producer Alcoa (NYSE: AA) kicks things off with reporting their results on Monday. Two other standouts that report their earnings next week are JPMorgan Chase (NYSE: JPM) and Wells Fargo & Company (NYSE: WFC) which issue their results on Friday. I will be particularly interested in what JPMorgan has to say for their second quarter. This is the period in which their trading division experienced a multi-billion dollar trading loss.
As we enter into second quarter earnings reporting season, market expectations are so low for the quarter that I am looking for some upside surprises to occur within certain sectors. I am not sure if we are going to see much top line growth, however, over the past several quarters, companies especially in the tech sector have demonstrated exceptional productivity prowess which have certainly accentuated their bottom lines. That said, I will be extremely careful with how I navigate and trade these markets with a preference towards waiting until earnings reporting season concludes before making any considerable commitments. Good luck to all.
Have a great weekend 🙂