TRADING THE WEEK: Jobs Number Fails to Spark Trader Interest

The more things change, the more they stay the same. Even on Wall Street.

The much anticipated non-farm payrolls report, released Friday, failed to break the current market malaise when it comes to direction of action, conviction of traders and what the future of interest rates looks like. Traders told Markets Media that the data stoked a halfhearted summer Friday rally, but it failed to change the current wait-and-see attitude of the market.

“The data weren’t enough to move the market one way or the other,” a floor trader said. “It’s almost disappointing – I wanted a number that would move the market substantially and get the Fed to move. No more on-hold type of trading. Let’s move some stocks.”

The Labor Department said the U.S. economy added 151,000 jobs in August, while the unemployment rate remained steady at 4.9%. Those figures were weaker than economists polled by MarketWatch, who had expected 170,000 jobs to be added to the U.S. economy in August, and a broader market consensus for about 180,000 jobs.

The weaker-than-expected report is viewed as potentially reducing the odds of a September interest rate hike at the FOMC meeting slated for September 21 and 22. Over the past few weeks Fed Chairwoman Janet Yellen and other key central bankers had previously hinted that a rate hike would occur at this meeting. But in light of the jobs data, a rate hike is hardly a cinch.

“The longer the data fails to move the market, the less likely the Fed can move rates this year,” another trader said, adding the Fed hasn’t historically moved interest rates ahead of a major election for fear of beg viewed as political.

“The market wants to trade, but really can’t,” a third trader said. “We’re being held hostage by the Fed.”

Last week the volume traded on U.S. equity exchanges averaged 6.12 billion shares per day for the week ended September 2, according to Bats Global Markets data. That’s up from an average of 5.68 billion shares in the week ending August 26.

In other market news, IEX completed its transition to a full-fledged public stock exchange from dark pool, according to spokesman Gerald Lam. This makes IEX the 13^th US stock exchange.

Also, the U.S. Securities and Exchange Commission’s tick-size pilot is taking one more step towards implementation. According to Financial Industry Regulatory Authority, the actual symbols or companies whose stocks will be included in the pilot will be posted on the regulator’s website on Sept. 6. This group of securities will be constant for the duration of the pilot program, which is scheduled to begin on October 3 and last for two years. The tick-size pilot is a data-driven test to evaluate whether or not widening the tick size for securities of smaller capitalization companies would impact trading, liquidity, and market quality of those securities.

This Week’s U.S. Economic Indicators of Interest:

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• Finra to Release Tick Pilot Stocks Next Week
• U.S. Buy Side Split on ‘Brexit’