Courtesy of Doug Short’s Advisor Perspectives.
All eyes were on this morning’s employment report for April, which largely disappointed expectations. The equity market was little fazed by the light growth in nonfarm new jobs. The S&P 500 bounced off its rather unremarkable -0.55% intraday low about 90 minutes into the session. It slowly rallied to its 0.35% intraday high as the final hour approached and ended the session just a tad lower with a 0.32% closing gain.
About that jobs report … is “mediocre” an apt description? Consider: The number of new jobs came in at 160K, well below the mainstream expectation of about 200K. On the other hand, since January 2011, nonfarm payrolls have increased by an average of 0.15% monthly with a high-low range of 0.26% to 0.03%. The April increase was 0.11%, which puts it at the 29th percentile of the 64 months in this time frame. For more on the April jobs report, see our analysis here.
The yield on the 10-year note closed at 1.79%, up three basis points from the previous.
Here is a snapshot of past five sessions in the S&P 500.
Here is a weeky chart of the index. At the end of the first five of the 21 market days in May, the index is down a modest 0.40%. This is the second consecutively negative weekly close. Trading volume was right at its 10-week moving average.
A Perspective on Drawdowns
Here’s a snapshot of selloffs since the 2009 trough.
Here is a more conventional log-scale chart with drawdowns highlighted.
Here is a linear scale version of the same chart with the 50- and 200-day moving averages.
A Perspective on Volatility
For a sense of the correlation between the closing price and intraday volatility, the chart below overlays the S&P 500 since 2007 with the intraday price range. We’ve also included a 20-day moving average to help identify trends in volatility.
