Friday morning trading kicked off on the news that March’s job gains hit a seasonally adjusted 88,000 jobs–its lowest number since June 2012. This came in much lower than economists’ estimates for a?190,000 increase in jobs.
March unemployment dropped?to 7.6% from 7.7%. This represented the lowest number since December 2007, but the fall came as more Americans left the labor force.
Get ready for a bumpy trading day.?
Investors reacted negatively to the news and the VIX rose to its greatest intraday level last seen in a month as it jumped to 15.65 (13%) before moving back down, reported The Wall Street Journal’s Katilyn Kiernan.?
For the day, the VIX closed at 13.92, up 0.22%.
Mark Sebastian, chief operating officer at OptionPit, said of the rise to The Wall Street Journal,??There was a buildup in volatility into the jobs announcement and now going into the weekend, it isn?t up as much as it could be. The VIX has sold off partially because stocks have recovered a bit and because uncertainty is gone now that the number is out.?
Also jumping in on the anxiety were volatility ETF investors, leading to increases during the trading day, reported Barron’s Brendan Conway. This included?VelocityShares Daily 2x VIX Short-Term ETN?(TVIX) and?ProShares Ultra VIX Short-Term Futures ETF?(UVXY), up 8.5% and 11%, respectively.?Barclays iPath S&P 500 Short-term VIX Futures ETN?(VXX) rose 5% plus.
In addition, the VIX futures curve stayed relatively steep as investors priced in a 20% increase through mid-July, reported the WSJ, while July futures traded at 17.40.
April contracts, expiring on April 17, traded at 14.80.?
Overall, it was a rough day for the market. The S&P 500 and the Nasdaq endured their worst weeks in 2013.?The S&P 500 fell 1%, while the Nasdaq slipped ?2%. The Dow fell 0.1% for the week–its second worst one for the year.?