Market Analysis

Bonds are negative today but not sharply in response to news that the US Unemployment Rate dropped from 9.0% to 8.6%.  Analysts had expected the rate to stay steady.  The survey used to generate the unemployment rate differs from that used to generate the Non Farm Paroll report which came in slightly worse than expected with a payroll change of only 120,000 vs an expected increase of 123,000.  The private sector added 140,000 jobs and the public sector shed 20,000.  The services industry provided much of the private job growth, with retailers adding 50,000 workers and bars and restaurants hiring 33,000 new employees. Professional and business services, including temporary employment firms, contributed 33,000 new jobs. Manufacturers added just 2,000 workers, which was fewer than expected and down from 6,000 in October. The construction sector shed 12,000 positions. 

In Europe, depending on which editorial you read, the European Union is either on the brink of a new day with a tighter, more cohesive union, or is on the verge of a break up.  The coordinated move earlier this week of the Federal Reserve and other Central Banks to announce plans to provide liquidity to Europe has given those betting on a worst case scenario pause.  Whether one agrees with his actions or not, the reality is that the market believes that Fed Chair Bernanke means business.  That cannot be said for any other political leader involved in the crisis at this time.