By Greg Peel

The Dow closed down 18 points, or 0.1%, while the S&P was flat at 1432 and the Nasdaq lost 0.1%.

If we take yesterday's Australian jobs numbers and compare them to last week's US numbers we see clear evidence of the yin and yang of an "unemployment rate" and how politicians manipulate the information for their own agendas.

In the US it is considered that 200,000 new jobs per month are required to lower the unemployment rate, yet only 114,000 jobs were added in September and the rate fell to 7.8% from 8.1%. In Australia yesterday it was revealed a greater than expected 14,500 jobs were added in September, yet the unemployment rate rose to 5.4% from 5.1%. The bottom line is that the "unemployment rate" in each case simply measures those people without a job actively looking for work, and does not measure those who would like a job but have given up looking.

This "participation rate" of those looking for work is considered as important a measure as the actual jobs numbers themselves, as it is a lead indicator of confidence ? "I had given up but there's seems to be more opportunity out there now so I'll try again". Or ? "I've been looking for months but it's hopeless so I'm giving up". The US drop to 7.8% was an example of the latter, while the Australian result represents the former. Economists would never consider that an increased participation rate represents people "desperate for work so they can pay the carbon tax". Look into Hockey's eyes ? he doesn't believe it for a second either.

So unemployment figures always have a natural counterbalance and interpreting them is not as simple as "higher unemployment rate equals bad". As to how the RBA will respond is thus uncertain, but if we do get a cut on Cup Day, I'd suggest we were likely to get one anyway.

Speaking of politics, last night ratings agency Standard & Poor's downgraded Spain to one notch above junk status. Gosh, do you remember the old days when markets would tank on such news? They were fun. Today, of course, everyone realises agency ratings are already old news and in this particular case, the response was a seemingly counterintuitive jump in the euro. The euro rose because the downgrade puts more pressure on Madrid to go for the bail-out, and the world is wishing Spain would just get it over with. Moody's is still considering whether to downgrade Spain to actual junk.

After a couple of sharp down-sessions, the Dow was up 71 points at around 11am with the downgrade providing some hope, but then news hit the wires that Samsung had successfully appealed against the ruling that claimed it had stolen Apple's tablet technology. Down went Apple, and the largest stock in the world by market cap can't help but have an influence on the indices. It's not in the Dow, but when Wall Street starts selling it doesn't discriminate. Apple has now "corrected" by 10% from its September all time high, but there'll yet be a counter-appeal.

Outside of the fruit shop, Citigroup last night released a report upgrading US equities as an asset class and suggesting stocks will rally through 2013. Morgan Stanley also issued a report, suggesting that the US natural gas price will hit US$5/mmbtu next year (US$3.62 last night, up 4%) with the northern winter providing increased demand for electricity and power companies again switching away from coal-fired.

The Morgan Stanley report provided a boost for energy stocks, while Citi's declaration ran into both Apple and the pervading feeling that Wall Street needs to pullback until uncertainties are resolved, such as the fiscal cliff.

The euro's jump sent the US dollar index down 0.2% to 79.78, so gold rose US$4.80 to US$1767.70/oz and the Aussie is up 0.3% to US$1.0264. As far as the rest of the energy complex is concerned, an unconfirmed rumour spread of a pipeline explosion in the Middle East, which sent the oils sharply northward, until the weekly US inventory data showed greater supply than expected. Brent closed up US$1.38 to US$115.31/bbl and West Texas rose US$1.15 to US$92.40/bbl.

Base metals moved little. After a solid surge, the Chinese iron ore price has fallen US$1.90, or 1.6% to US$115.80/t.

The SPI Overnight is up one point.

The eurozone will post its industrial production numbers for August tonight, while on Saturday China will release its September trade balance.

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