The Employment situation was relatively unchanged (155K jobs vs 155K expected & prior 148K) while the unemployment rate inched higher (7.8% vs 7.8% expected & prior 7.7%) The underemployment data showed conditions still at 63.6% or 14.4% that isn’t good frankly. Secretary of Labor Linda Solis expounded on the data by spinning, “…we created jobs by paying people not to work”. This is the kind of Orwellian talk we get from unqualified PC political appointments. (The CNBC interview is here but you’ll have to get beyond 3:00 minutes to catch this.)  Some thought an unremarkable employment report had a “goldilocks” feature to it meaning simply “even tepid news was good” since it wouldn’t stimulate the Fed to back-off current policies.

But there was some good news from ISM Services which jumped (56.1 vs 54.5 expected & prior 54.7). Perhaps this was seasonal hiring and post-Sandy activity. On the other hand Factory Orders fell (0% vs .3% expected & prior .8%).

Pimco’s Bill Gross wrote in his monthly letter his gripe about the Fed’s free money printing policies. And speaking of the Fed, St Louis Fed President James Bullard suggested the Fed might end QE in 2013. And some more desperate commentators are promoting trillion dollar coins (platinum the current choice) to wipe out our debt. It’s quite amusing but liberal blogs are seriously promoting it.

So Friday’s news was Fed-centric as stock prices continued to hold and add to the recent rally. The dollar (UUP) rally continued but then eased late allowing gold (GLD) to recapture early losses. Commodity prices (DBC) were lower overall. Bonds (TLT) managed to eke-out a small price gain but suffered on the week with stocks rising and QE uncertainty.

Stocks were led higher once again by financials (XLF) and materials (XLB). Financials were pushed higher by Goldman Sachs positive calls for Citigroup (C) and with materials hopes for a good report from Alcoa (AA) on Tuesday. Tech (QQQ) shares underperformed as Apple (AAPL) dropped nearly 2.5% while Microsoft (MSFT) also saw losses. So rotation within the markets to long neglected sectors from technology seems the order to start 2013. At the same time earnings for both tech and financials have been reduced by 10% by S&P Dow Jones Indices.

It’s still hard to imagine with taxes hitting 77% of the population combined with what should be an ugly debt ceiling fight the economy and markets would do well. But, who’s to argue with the tape now?

Volume overall was ultra-light once again but then they don’t put this data on your brokerage statement. Breadth per the WSJ was positive.

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