Non-Farms Come In Slightly Worse, But Not Too Bad 115k vs 170k~ est.

The unemployment report came out today and it appears as though we have had a slight miss vs. the estimates. Typically we would see a sell off on a poor report, but the immediate reaction (8:35) has been quite a mute outcome in U.S. equity index futures. Let's dive in to the number a little more.

Non Farm Payrolls 115k vs. 170k~ est.

The first, and usually most important number, non-farm payrolls, showed a miss of 55k. Usually a miss like this  should cause an intense sell off, but the whole picture is not represented by this statistic. 

Unemployment Rate 8.1% vs. 8.2%

The unemployment rate actually declined in April, which is a positive factor, but this statistic is not as reliable as the first, as many unemployed people are not counted in the rate due to various reasons (time out of the workforce etc.)

Prev. Month Revision 154k vs. 120k

It appears that last month's (March) job market actually added more jobs than was reported, and so this is a hidden bullish number. Obviously this month's unemployment report is a more important number, but revisions are to be watched as well.

Currently S&P 500 futures are down roughly 0.5%, which is not too large of a fall. I personally believe that this sell off is an opportunity to establish a long position in risk on assets with a tight leash. The reason for this is, a poor number was kind of expected by traders, and most people sold into the report (yesterday's decline). I wouldn't be surprised if we rally later during the day, as people realize this wasn't too bad of a report, considering the upward revisions of previous months as well. ADP and initial claims in April were lacklustre and so, this report was not too bad. Treasuries failed to sustain a meaningful rally, as the 30-year bond is currently up 0.1%.

The above image is a chart of the S&P 500 futures market. The last bar on the chart is the report reaction, and notice how it is a relatively small reaction, in comparison to previous reports and trading days. Typically, reversals are formed after important new events, so the mediocre jobs report may provide a bottoming day.

As you could probably tell, I am currently slightly bullish risk on assets, including equity, copper, and oil. I would be interested in establishing a better position in these assets (as I have little size on) today, with a tight leash.

Good luck traders for the rest of the trading day!