Although stocks were never significantly into profitable territory at any point last week, at the very least on Thursday it looked like we might stabilize with just a very minor loss. The bears had other plans on Friday, however, sending the market 1.85% lower that day to the lowest close in nearly two weeks.

And yet, it’s worth noting that neither the S&P 500 (SPX) (SPY) nor the NASDAQ Composite (COMP) broke under their most critical floors; we’re still not past the point of no return yet. (We are, however, getting close to that point again.)

We’ll explore it all below, as usual. But first, let’s run down last week’s and this week’s key economic numbers.

Economic Data

There was plenty of economic data to sift through last week, but there’s no doubt that the highlight was Friday’s jobs report for January. The Department of Labor said the unemployment rate finally edged the below the high 5.0% level to reach 4.9%.

Unemployment Rate Chart

Source: Thomson Reuters

The DOL also said we added 158,000 new payrolls last month, falling short of the expected 183,000, and coming in well below December’s to 251,000. Nevertheless, we’re still into our sixth straight year of net job growth for each month of the year… even if some of those months were “just barely.”

To the extent it matters, the ADP employment change report from earlier in the week said we added 205,000 new payrolls last month, topping that estimate for 190,000. Point being, we should probably be viewing data that’s on the fence in a glass-half-full light.

The other big item worth a closer look from last week are the ISM indexes – manufacturing and services. 

On the services side of the table, the ISM index scored 53.5, falling short of the expected reading of 55.0, but still above the 50.0 threshold that suggests a recession is underway.  As for the manufacturing index, it rolled in at 48.2… just a bit short of the anticipated reading of 48.3, but more important, once again below the key 50.0 level.

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