The weakest jobs report in years does not dissuade investors from piling into equities. While there is plenty of headwinds for markets, there is seemingly no thought to any downside potential. Oil is helping to keep a floor under prices as production has dropped and rumors continue to floated from OPEC.

Fed speakers are talking both sides of the story – ignore weak jobs numbers as the economy is in good shape while rate hikes may not be in the cards due to many concerning factors. Which story to believe? What is for sure is the the Fed wants to create confusion to keep investors guessing over what their next move will be.

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As Gomer Pyle would say: “Surprise, Surprise”

– Jobs report came in very light with on 38k new additions to payroll. However, the Unemployment rate dropped to 4.7% (Nov 2007 was last time unemployment rate was this low)      ?? Is this a weak or strong report?

– About 450k dropped out of labor force

– Some weakness due to the Verizon strike (35k)

– Last 2 months data revised down by 50K

– Average adds over 3-months 116k

– Wage growth was up slightly

With the weak jobs report the probability of a Fed rate hike in June dropped from 20% to 4% – through Fed futures outlook.

USD dropped hard on the report and sent gold, silver screaming higher – equity markets were not too thrilled – but recovered – now the S&P 500 is just 1% from all-time high. DJIA hit 18,000 in early trade.

– Are the negative interest rates finally kicking in?

Is the Fed creating “Organized Confusion” purposely? (Fed speakers out with both sides of the story – ignore the jobs report as economy is strong, but rates to remain low)

Oil holding close to the $50 level as almost all of the Nigerian pipelines are offline. Rebel attacks are causing major problems. Corrupt country – could big boys be helping to the rebels?????

Economic news just in:

* Among six regions that Moody’s assesses, the decline in growth is most pronounced in Eastern Europe and Central Asia. Here, Moody’s estimates that average median growth will be 2.6% from 2013 to 2016 compared to average growth of 6.5% from 2005 to 2008.

* World Bank cuts 2016 global growth forecast to 2.4% from 2.9% due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade and diminishing capital flows

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OPEC met to attempt to agree on “production caps” and the meeting ended with no agreement – again. But oil was unfazed as reports of a 9% drop in production over the past few months due to U.S. rigs offline. WTI Crude ~ $50.

Last week there was a some news about auto sales that was of interest. Is peak-auto now a thing?

* Automotive News reports that May 2016 marked the biggest monthly sales drop for the U.S. auto industry in nearly six years.

* The downturn was driven by a big drop in demand for passenger cars and two fewer selling days this May than the year-ago period.

* May 2016 was only the industry’s eighth monthly sales decline since 2009.

* Automotive News, citing True Car estimates, indicated average incentives per vehicle increased 7.1% to $3,034 in May versus the same period a year ago.

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