Stock Market Higher Even With Unemployment Data
The unemployment rate spiked rather highly in August, to 9.7%. Even though initial jobless claims, and continuing claims were down, the fact that the economy continues to shed jobs means that the unemployment rate is still rising. However, the silver lining to this story is that jobs are being lost at an increasingly slower rate. This means that there is a change that things might improve.
It is this silver lining that the stock market is trying to focus on today. In early trading, U.S. stocks are higher, albeit modestly higher. Investors are doing a few things that could be contributing to an overall better psyche on the stock market:
- Bargain hunting: Larger losses earlier this week means that investors can get some good deals. It’s a good time to do a little buying.
- Focusing on improvements: No, we’re not out of the woods yet. But we’re getting there. Stabilization in the housing market, as well as the fact that things aren’t getting worse, offer some hope for the future.
- Reality of a gradual economic recovery: It might finally be sinking in that we aren’t going to recover out of this recession immediately. Rather, it is going to be a slow recovery. Some investors might finally be understanding this.
Of course, today’s early gains may not last. The stock market could easily turn around if day traders decide to sell and take their early profits. Additionally, it might be that the bears overcome the cautious optimism that seems to be the main factor right now. But, as long as panic selling doesn’t become a problem, stocks might be able to maintain their tenuous gains ahead of the holiday weekend.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
