The American markets opened with a hangover following yesterday’s holiday, and various interest rate cuts in global markets failed to provide a quick remedy. Apparently, cheap, greasy money doesn’t hit the spot like a cheap, greasy breakfast burrito does. Or perhaps the indexes were still trying to digest recent events and a somewhat hazy economic outlook. Either way:
|Dow Jones Industrial Average (INDEX: ^DJI )
|S & P 500 (INDEX: ^GSPC )
|Nasdaq (INDEX: ^IXIC )
Source: Yahoo! Finance
All filler, no thriller?
U.S. stocks refused to find relief when the country’s largest payroll processor, ADP, revealed information indicating a boost in private sector employment during June. The report showed that 176,000 new jobs were added during the month, while an announcement from the Labor department stated that unemployment benefit applications fell 14,000, well below economists’ expectations.
Both reports, however, failed to stimulate the markets. Any euphoria experienced from global interest rate cuts fizzled by the end of the day, as well. While the announcements from China’s central bank and the ECB do not directly affect the American markets, the lackluster response could foretell tomorrow’s events before they unfold.
Friday’s markets will respond to non-farm payrolls numbers, or more simply, a "jobs report," set to be released early in the morning. Today’s hiring data was merely a preview of what’s to come. So, on the one hand, a strong jobs report could bolster markets and signal a strengthening domestic economy. On the flipside, a muted jobs number could cause unease, but also signal that the Federal Reserve will take similar actions to mimic global central banks and propel the U.S. economy forward.
For investors, could this be a win-win for the stock market? Many experts believe that’s the case. Then again, after a flurry of economic news failed to lift the market’s spirits today, perhaps the major indexes are just jaded.
The Foolish takeaway
Regardless, investors should hone in on the individual stocks that are critical to their portfolios rather than riding the wave of market swings. On the Dow, company-specific news emerged today, when two not-so-positive developments put JPMorgan (NYSE: JPM ) in the center of the spotlight once more. First, JPMorgan and Dow banking companion Bank of America (NYSE: BAC ) find themselves in the middle of a scandal revolving around the LIBOR interest rate. Secondly, a federal judge aske d JPMorgan today to explain why it shouldn’t be forced to turn over e-mails sought by regulators in an energy-market manipulation probe. As if the debacle involving the so-called "London Whale," and a multi-billion dollar failed trade did not make investors squirm enough, go ahead and add this to the mix.
To wrap up, consider the reasons you’re invested and the industries you’re invested in. The market’s volatility should not concern a long-term, patient investor. Likewise, a few bad apples do not mean an entire industry is rotten. Evaluate companies like Bank of America by conducting more in-depth research, which you can find in our premium reports. Our senior banking analyst breaks down the risks facing this institution and the opportunity for a strong rebound. Click here now.
I happen to find several banking institutions highly attractive right now, and I’m not alone. Warren Buffett recently expressed optimism for conservative banks, and our analysts have uncovered what’s at the top of Buffett’s radar. Read on in this free report for a limited time. The report highlights “The Stocks Only the Smartest Investors Are Buying.”