The Commentary:

“Dear CIGAs,

So much for the anxiously anticipated payrolls report – it turned out to be an absolute dud with the economy shedding yet more jobs (try to think of this in human terms). Another 95,000 jobs disappeared. While private sector hiring did show a mild increase, government jobs (state, local and federal – census workers) showed another drop.

Further distressing news was that July and August numbers were revised DOWNWARD. If that were not depressing enough, preliminary estimates for the yearly benchmark revisions reveal that the government underestimated the overall number of job losses for the year and may erase another 366,000 off its books. Keep in mind that these are all “official” government numbers. The reality is even worse. By the way, the underemployment number is closer to 17.1%. Nearly 1 out of 5 are either out of work or working part time being unable to secure full time employment.

Obviously this is not what the stock market was hoping for (it is also the last report before the upcoming November election) but it is what bond traders were hoping for as this sets the stage for another round of Fed Quantitative Easing. Bonds moved higher in anticipation of more purchases next month or certainly in December.

The rest of the markets were somewhat torn by the news. Commodities in general were moving higher on the reflation play (QE2) but some of the individual markets such as crude oil were caught in a tug of war between the rotten jobs number, the subsequent continued slow growth and slow demand, and the notion that more funny money will punish the Dollar. Crude was higher but its gains were subdued as it is thus far unable to stay above $83. Should it be able to better than market as of today’s close, it will be poised for a run towards $87.

It was not so in the grains where a stunningly bullish corn number from USDA caught that market by surprise. That market has been on a real roller coaster of late. It was just a week ago when a USDA report caught everyone by surprise but on the opposite side. Then the numbers show corn stocks larger than most were expecting and the market went limit down. At the time there was a great deal of suspicion regarding USDA’s numbers. Those fears were confirmed today and the doubters vindicated as the release showed a substantial drop in the overall corn yield with the result – the market went limit up and will probably do so again when it reopens Sunday evening. Can anyone say, “whiplash?” Wheat and soybeans were both pulled higher by corn with both markets locking limit up on the open of pit session trading; however, wheat has faded a bit but still remains sharply higher moving back occasionally hitting the limit again.

The Dollar moved lower but weakness in the Euro keep it from falling sharply. I am not certain why the Euro was relatively weak considering the payrolls number. A European official was attempting to jawbone the Euro lower saying that it was overvalued based in current fundamentals but his words do not really carry all that much weight. Still, some looked at it as revealing that the Europeans are very uncomfortable with the Euro near 1.40. There are also increased grumblings from various quarters of the world about what is being viewed as a deliberate devaluation of the Dollar by the US. The BRIC nations are becoming rather vocal and who can blame them? One wonders if perhaps there are some smoothing operations taking place to slow the Dollar’s descent and quiet some of the critics. Whatever the reason it kept the greenback from falling below the 77 level.

The hesitancy of the Dollar to break 77 is probably what kept gold from taking out its record high from yesterday’s overnight session. Looking at the >JSMineset.com