The equity markets finished a very volatile day on an up note after the market gyrated violently for most of the trading session. At approximately 2pm EST, the US equity S&P 500 Index was down nearly 19 points but managed to finish the day up 3 points to 1066. Crude Oil slammed down to $69.70 but was able to finish the trading session at $71.60. The turnaround in the market was impressive, as the outlook for the close was very bleak.
Prior to the open, the Bureau of Labor and Statistics released the Employment figures for the US economy. The unemployment rate, calculated using a household survey, fell to 9.7% last month from an unrevised 10% in December, according to the Labor Department. Economists surveyed had forecast the jobless rate would edge higher to 10.1%. Meantime, nonfarm payrolls fell by 20,000 compared with a revised 150,000 decline in December. Economists had expected payrolls to be flat. The December figure was revised down sharply from an originally reported 85,000 drop. The household number was a surprise to the market and possibly could be the catalyst the markets are looking for to counteract the issues of sovereign risk trouble in Europe.
The Canadian dollar was losing ground to the US dollar up until the surprise Canadian unemployment released on Friday. There were 43,000 more Canadians working in January, according to Statistics Canada, about three times more than what economists were expecting. The unemployment rate fell to 8.3 per cent from a revised 8.4 per cent in December. The results were better than the expectations of economists, who were calling for 15,000 additional people working last month and a jobless rate of 8.5 per cent. This comes after a revised loss of 28,300 people from the job market in December, but it was the fourth employment gain in six months. The private-sector was responsible for all of the job gains, and it was mostly from part-time positions.
Recently prices for CDS contracts have soared as investors snapped them up on worries about the bulging debt of nations including Spain, Portugal, Greece and Latvia. On Thursday, the cost of CDS contracts that insure the debt of a number of euro-zone nations with large budget deficits rose again. The annual cost of insuring €10 million ($13.9 million) of Greek government debt against default for five years rose €26,000 to €423,000.