CNN Email: Market's Tiny Wed. Losses Due to 'Looming U.S. Default,' Not Poor ADP Jobs Report
NASDAQ.com says that the Dow Jones Industrial Average closed down 58.56 points today. The S&P 500 lost 1.13 points, while the NASDAQ lost 2.96 points. In percentage terms, those losses were 0.39%, 0.07%, and 0.08%, respectively.
Even though there's usually a large element of speculation relating to why the broad markets go up or down on any given day, the pretend know-it-alls at CNNMoney.com seem to have had a pretty obvious preset agenda in their post-close email, as will be seen after the jump:
Oh the humanity!
Even if the drops were entirely due to default worries — as if that was the only significant matter on the table today, which it wasn't — the declines are so minor in two of the three cases that they're almost rounding errors.
I think you could make a case that the markets didn't fall as much as they did because investors might be okay with shutdown- and debt ceiling-related events. That's because ADP's private sector payroll report came out today, and it wasn't good at all.
Predictions were that September job additions would be 180,000. They came in at 166,000. Additionally, August got revised down by 17,000 to 159,000. July's downward revision from 198,000 to 161,000 was over twice as steep as August's.
In the official release, Mark Zandi, chief economist of Moody’s Analytics and the report's official spokesperson, noted that “The job market appears to have softened in recent months." No kidding.
In the post-release conference call, Zandi noted that analysts' estimates for third quarter GDP growth are now running at an annualized 1.0 percent to 1.5 percent, which is lower than most of the establishment press has acknowledged.
Separately, Zandi is still clinging to the notions that Obamacare is not having visible adverse effects on the job market.
The markets cannot have been pleased with ADP's reported results, unless they think it will enable the Fed to extend "quantitative easing," i.e., printing $85 in virtual money every month to buy Treasury and mortgage-back securities no one else will buy," even further. But that matter was settled for the foreseeable future with Bernanke's "surprise" announcment last month that he would stay the course.
Any reasonable person would see a 14,000-person shortfall in ADP's report plus over 50,000 in job writedowns for the previous two months as the mostly explanation for a much sharper market decline than we saw today. So if the folks at CNNMoney.com insist on dragging the "looming U.S. default" into the mix, its effect would seem to have been a partial offset to the dreary jobs news.
But of course, that's not how wish to see it, because it doesn't fit their agenda.
Cross-posted at BizzyBlog.com.