The bears continue to have the upper hand in the stock market. Following on last week’s poor showing, which was capped off by Friday’s dreadful action, we had more selling yesterday and so far today have yet to gain any traction. As a result, the market’s near-term prospects are starting to look bleak.

Europe’s problems remain front and center. Hungary (which isn’t a part of the monetary union) and Belgium (which is) have joined the “perp” walk of debt-laden countries bond and stock investors alike are eyeing with suspicion. In Germany, the Merkel government’s plan to help fund a rescue package for the ailing euro-land counties may be challenged in the court system. If successful, the challenge would likely scuttle the whole deal and hasten the unified currency’s demise.

Here at home, Friday’s employment report was an unmitigated disaster. Excluding part-time census workers and the Bureau of Labor Statistics’ guess at the number of jobs added through the creation of new businesses, May’s payroll numbers were essentially flat and far below the consensus forecast. The overall unemployment rate contracted, but merely by virtue of the fact that a great number of people gave up searching for work. Approximately half of the jobs lost since the recession began in December, 2007 are permanent rather than temporary layoffs. So we’re not likely to see a surging rebound in employment anytime soon.Read more...