Global investors gave global markets a big thumbs down in response to Friday’s jobs report that missed all expectations.
Friday’s Non Farm Payrolls report was a true disaster, coming in at 120,000 and so well below the recent average gains of approximately 250,000/month.
The report comes on top of concerns over slowing growth in China, recession in Europe and slowing growth in America in spite of the best and historic efforts of the Federal Reserve and European Central Bank.
Major stock indexes all dropped today with the Dow Jones Industrial Average (NYSEARCA:DIA) dropping 1% or 130 points, the S&P 500 (NYSEARCA:SPY) dropping 1.14% and the Russell 2000 (NYSEARCA:IWM) dropping 1.8%.
Fundamentals continue to weaken around the world and technical indicators continue to show growing weakness, as well.
The Dow Jones Industrial Average (NYSEARCA:DIA) has broken through its 50 day moving average, along with the psychologically important 13,000 level. The Russell 2000 has also broken its 50 day average while the S&P 500 (NYSEARCA:SPY) and Nasdaq 100 (NYSEARCA:QQQ) remain above their respective 50 day averages.
More ominously, the Russell 2000 (NYSEARCA:IWM) and Dow Jones Industrial Average (NYSEARCA:DIA) have both broken through significant support levels in point and figure charting methodology to generate sell signals. On the Dow, the downside target is now 12,600, a further declined of 2.5%, while the Russell 2000 (NYSEARCA:IWM) bearish objective is 765 or 5% below today’s levels.
Certainly policy makers around the world must be confounded by the slow pace of this recovery and the ongoing resistance to demand and growth that global economies are displaying in spite of the trillions of dollars that have been thrown at this problem over the last several years.
Bottom line: This is an important week with earnings reports starting to come in tomorrow with Alcoa amid expectations and warnings of slower earnings growth ahead. Dr. Bernanke will be in the spotlight as markets again look to the Fed for help in what increasingly looks like a non self-sustaining recovery. A correction has been long overdue from a technical perspective and now we will have to watch and wait to see if this is a mere garden variety correction or the start of a replay of last year when intense weakness set in as April showers turned to May flowers. For today, the thumbs down looks decidedly not green.