Good morning. Equities started the day nicely higher after Mario Draghi of the ECB announced the central bank was cutting its benchmark interest rate to a record low, from 0.15% to 0.05% (seriously? A 0.1% drop ain’t going to help or hurt my portfolio) and planned to purchase asset-backed securities (now THAT will have an impact) but the gains couldn’t hold and the market fell back in afternoon trading, although it was just a scratch. The Dow fell 8 to 17,070, the S&P 500 dropped 3 falling back below 2,000 to 1,998 and the Nasdaq lost 10 to 4,562. As I mentioned yesterday, being Mr. Draghi stated 2 weeks ago in Jackson Hole that ECB was going to use “all available instruments” to revive the European economy so a lot of this was already built into the market.

There was a tsunami of economic reports released yesterday here in the U.S. The Institute of Supply Management said that its services index rose to 59.6 last month from 58.7 in July which is the highest recorded since the measure was introduced in January 2008 and the fastest pace on record. Yesterday we also had the government’s report on weekly jobless claims which came in at expectations 302,000, up 3,000 from the previous week but that’s really just chatter. ADP, the nation’s largest payroll processor, noted private sector jobs increased in August by 204,000 compared to 218,000 in June. Although it’s a “good” number it came in a little below the market’s expectation of 220,000 and we all know the importance of how actuals come in relative to expectations. The importance of the ADP report is it sets the stage for today’s BIG report which is the Labor Department’s Employment Situation report, which was literally just released. And came in very disappointing. Nonfarm payrolls increased 142,000 last month, the smallest increase in 8 months. The market was looking for a number closer to 225,000. The unemployment rate fell to 6.1% as fewer folks looked for jobs (62.8% from 62.9%). The 142,000 has me perplexed. Weekly unemployment claims are currently hovering near pre-recession levels and numerous manufacturing and service sector reports showed strong employment growth in August. Additionally, household perceptions of the labor market have brightened significantly which reflects tightening labor force conditions. So now we have to wait until the first Friday of October to see if there’s a revision. Sure doesn’t make investing or trading easy does it?

So how’s the market taking the lousy number? Actually pretty well with Dow down only 14 points. Looks like investors don’t believe it either.

Oil has been extremely volatile this week (big down Tuesday, big up Wednesday and material down yesterday) with WTI falling $1.90 to $64.45 and Brent losing $0.94 to $101.83. Really pressuring WTI are two facts. First, the DOE released its weekly crude and products report yesterday, a day late due to the holiday, with inventories falling less than expected. Second, the U.S. dollar vs. euro exchange rate is at its lowest level in more than a year putting serious pressure on not only WTI but all commodities priced in U.S. dollars. Trading oil is really tough right now for your Magic 8 Ball must tell you how Libya’s tribal battles go as well as what, or not, Russia and the pro-separatists in eastern Ukraine will do next. I guess this week’s volatility has worn out traders for WTI is down a meaningless 10¢ this morning.

The EIA released its weekly natural gas storage report yesterday showing the U.S. injected 79 Bcf last week. This was moderately bearish with the market expecting a 74 Bcf injection. On the news, the October Nymex contract closed down 2.8¢ at $3.819. Storage levels are now 15% below last year and 16% below the 5 year average. Pretty incredible when you think we exited the winter (end of March) with storage levels 51% below last year and 55% below the 5 year average. A complete lack of heat waves east of the Rockies this summer did wonders to help us catch up. So why did natural gas only close down 2.8¢? My clients know. I guess natty traders didn’t come in this morning for natty is down 0.4 ¢. Complete chatter.

And finally, I read an article this week about Andrew John Hill whose hedge fund has been getting crushed lately. He strongly believes the shale oil revolution will fizzle out and has been shorting it justifying the short position saying “When you believe something, facts become inconvenient obstacles.” Have a good weekend.