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Weakest Jobs Report in Five Years Surprises Everyone

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Friday's job report of only 38,000 jobs created in May was the weakest in more than five years. And it pretty much shocked everyone. Some of the market reactions, however, were reasonably predictable. Interest rate yields tumbled along the entire yield curve. Chart 1 shows the 10-Year Treasury Yield (TNX) plunging 10 basis points and closing near the lowest level since February. Naturally, that pushed bond prices sharply higher. Chart 2 shows the 20+ Year Treasury Bond iShares (TLT) surging to a four-month high. The reason for that sharp reaction was that the weak job report pretty much took a June rate hike off the table, and may have jeopardized Fed plans for a hike sometime over the summer. The two-year yield, which is most sensitive to a rate hike, fell even more than the long bond. The plunge in bond yields helped some stock groups like utilities and hurt others like banks.


I hope you can join us for ChartCon 2016 on September 23rd & 24th.  I understand it will be online this year which means anyone should be able to attend.  I also understand that tickets are going fast.  Click here for details.

- John

John Murphy
About the author: is the Chief Technical Analyst at StockCharts.com, a renowned author in the investment field and a former technical analyst for CNBC, and is considered the father of inter-market technical analysis. With over 40 years of market experience, he is the author of numerous popular works including “Technical Analysis of the Financial Markets” and “Trading with Intermarket Analysis”. Before joining StockCharts, John was the technical analyst for CNBC-TV for seven years on the popular show Tech Talk, and has authored three best-selling books on the subject: Technical Analysis of the Financial Markets, Trading with Intermarket Analysis and The Visual Investor. Learn More
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