Non Farm Payrolls-Is the Gold rally back on?

The Non Farm Payrolls result for the month of december, coming in at -85K, was a disappointment to most traders. However interestingly the stock market rallied off it, with the dow closing at 10620.

What to make of it?
The Dow rallying (after its initial sell off) probably indicates that the market is relieved to know there will still be some time before the Fed tightens, facilitating the rally to continue off "cheap money".

The december payrolls were also revised to show a gain of 4k, compared to its previously stated loss of -11k.

Is the Gold Rally/Carry trade rally back on?
Perhaps. Gold sold off prior to the news release, however subsequently came in stronger, and closed at $1139. Gold being the bet that the Fed cannot tighten, as soon as it needs to (in order to avoid escalating and excessive inflation lecvels), due to the adverse affect it would have on a struggling job market.
Prior to the release expectations for a rate increase by June were around 50%. They must now surely be corrected. Given that, in order to be sure of any sort of stabilisation, or recovery, they would ideally be looking for consecutive monthly improvements in the unemployment figure (well thats what I would be looking for at least).


Implications for consumer spending and topline growth (Q4 earnings and beyond)?
Clearly without evidence of a stabilising unemployment number, the notion of an increase in consumer spending this year to support top line growth of companies (as opposed to profits made by cost cutting) is questionable.
Another fact to point out is that there has been no correction in the rising yields for treasuries with the outcome of this report, so it looks like the mortgage rate level is set to rise from its current 5% level. This will not aid the property market, as more foreclosed properties come onto the market (due to the high, and increasing unemployment rate) with buyers still uncertain about the property market.
This means a large number of American homeowners will still remain underwater (their property being worth less than their mortgage), and thus unable to use their home equity for loans, and so prevent an increase in consumer spending.
This combined with the the vastly contracted availability of credit lines to the consumer, is unlikely to the support the short term desire (of the market) for companies to produce top line growth, in my opinion.


Meredith Whitney Cuts estimates on Goldman Sachs;
News broke on Thursday of Meredith Whitney cutting her profit estimates for Goldman Sachs, and Morgan Stanley among others. The share price took an immediate correction, but quickly rallied back to close on Thursday the 7th at $178.
Given the steepness of the yield curve and spread between the 30yr and 2yr (traditionally indicative of profitability of banks) I would recommend that the rally seen in banking stocks since the start of this week is likely to continue.

Is the Gold rally back on?
Having opened at $1156 just now, from a close of 1139. Yes it most definitely is!