Is the Dollar, S&P500 negative correlation dying out?

The U.S market has gone through its ups and downs over the past year, dropping tremendously due to a severe subprime and financial crisis, only to present a strong rebound within a short couple of months. Even though economic data has shown mild improvement, Friday’s event told a different story, showing that the U.S economy could now be at a critical turning point.

After 4 days of suspense, the Bureau of Labor Statistics released its awaited job numbers, surprising analysts with better than expected results. According to the numbers, the U.S economy shredded only -247k workers, during the month of July, much less than the consensus of -330k. In addition, the unemployment rate dropped for the first time in over a year, coming out at 9.4%. Even though the results showed that U.S workers are still losing their jobs, due to the economic situation and global slowdown, the results increased investor’s confidence, showing that the trend in jobs market has presented a dramatic change.

As shown in the “NFP eye opener, leads to a USD curve ball” report, the U.S job market has now formed a lower-high, above January’s lows. In addition when taking a glance at the chart below one can see that while the NFP numbers are showing a dramatic improvement, so is the angle of the unemployment rate – flattening out, showing signs of stability. According to recent numbers July’s rate, showed slight improvement, coming out equal to May’s number of 9.4%.



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The NFP seems to go more higher through the unemployment line.