Weak US Jobs Data Blows Fed’s Rate Hike Plans Out of the Water

Weak US Jobs Data Blows Fed’s Rate Hike Plans Out of the Water

$DIA, $SPY, $QQQ, $VXX, $GLD

Gold had the biggest gainer in a week after US employers added the fewest workers in 7 months, weakening the case for the US Fed to raise interest rates anytime soon.

The 160-K gain in NFPs in April followed a revised 208-K rise in March, a US Labor Department report showed Friday. The median forecast called for a 207-K April advance. The jobless rate, projected to ease, stayed at 5% of those in the labor market. Millions of Americans have opted out.

Gold futures have risen 22% this year in the best start since Y 2006, driven by speculation that the Fed will be slow to tighten monetary policy.

Low borrowing costs are a boon to Gold because it does not offer yields or dividends. Odds that the Fed will raise rates next month dropped to 6%, from 10% Thursday and 75% at the beginning of the year, based on Fed-fund futures data.

Gold futures for June delivery rose 1.7% to finish at 1,294 oz at 1:50p EDT on the COMEX in New York. The precious Yellow metal gained 0.3% on the week.

The Fed is data-dependent, and these data are not going to Wow them. In fact the prospect of QE-4 looms.

Friday, the US major stock market indexes finished at: DJIA +79.92 at 17740.63, NAS Comp +19.07 at 4736.16, S&P 500 +6.51 at 2057.14

Volume: Trade was above average with 945-M/shares exchanged on the NYSE

The S&P 500 gained 0.3%, paring its weekly loss to 0.4%. The DJIA (+0.5%) finished ahead of the Nasdaq Comp (+0.4%).

Have a terrific weekend

Paul Ebeling

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