Markets opened on an upswing Friday as the labor report came in at 117,000 jobs added for July, higher than the predicted 85,000. The unemployment rate even ticked downwards to 9.1% from 9.2% in June. But the rally quickly evaporated as concerns about the growing European debt crisis and how government spending cuts might stymie economic growth took precedence.
Though the job numbers were better, the number would have had to come in more like 150,000 to allay investor concerns. Also, the the unemployment rate decrease was mainly due to people giving up looking for work.
And while the debt ceiling bill was a good down payment on getting the debt to GDP ratio better, folks are still worried that S&P might downgrade the US bond rating. The ratings agency had indicated they wanted to see $4 trillion in cuts in order to keep the bond rating high but the plan Washington enacted this week only calls for $2.5 trillion, with a series of hems and haws and hedges.
Even supposed safe-haven gold is seeing a sell-off and volatility. When it’s liquidation time, everything gets liquidated. The streets are awash in fear and there seems to be no secure place to put your cash.
The only sure thing investment is to spend your money and time on your friends and family and bettering yourself. Take a short vacation. Take a class. Learn something new. Work on the skills you need to start a small business. Amid all the uncertainty, real-life experiences of value with people you care about are the only things that pay guaranteed dividends.
U.S. Stocks, Commodities Drop on Debt-Rating Concern [Bloomberg]
U.S. Posts Stronger Job Gains Amid Fear [NYT]
Wall Street Rally Quickly Fizzles [NYT]
Stocks Nose-Dive Amid Global Fears [WSJ]
Even Gold Loses Its Midas Touch [WSJ]