Futures -20bps this morning on a surprise rally off the early lows despite the headline “miss” on the Official Change in Nonfarm
Payrolls, which came in at -20k vs. the +15k survey and a much higher whisper number. It’s worth noting two things about this morning’s jobs report. First, the U6 rate (Underemployment; includes part-time workers who’d prefer a full-time position and people who want work but have given up looking…some consider the “true” measure of unemployment) came in slightly to 16.5% from 17.3%. (This is probably why the market actually rallied off the initial futures sell-off immediately following the release.) I’m not sure how the math works, but this “shrinking of the labor force” may be responsible for the reduction in headline unemployment from 10% to 9.7%. Second, the 2009 revisions are to the down side, representing ~1M more jobs lost than previously recognized. That can’t be good:
Jan. Dec. Nov. Oct. Sept. Aug. 3-month
2010 2009 2009 2009 2009 2009 Average
Unemployment rate 9.7% 10.0% 10.0% 10.1% 9.8% 9.7% 9.9%
Rate (3 decimals) 9.687% 9.975% 9.979% 10.147% 9.848% 9.709% 9.880%
Avg. hrly earn prod. 0.3% 0.2% n/a n/a n/a n/a 0.2%
Avg. wkly hour prod. 33.3 33.2 33.2 33.0 33.1 33.1 33.2
Nonfarm employment -20 -150 64 -224 -225 -211 -35
Previous estimate n/a -85 4 -127 -139 -154 n/a
Here is some market chatter on the jobs data from a bulge-bracket trader who pays attention:
Bottom line is that i dont think it matters…market has barely moved on it, there are wider concerns abroad right now which are going to control this market into the weekend…if anything people are arguing that this makes for longer low rates and QE actions etc. pushing out the possibility of hikes even further etc…there is some misunderstanding around the 09 revision.. blah blah.. what matters is that we got smashed yday, bounced above 1050, from the sentiment ive heard nobody is excited coming out of this number, i think its a momentary reprieve before another ugly day..
In corporate news, CSCO was the lone Dow Jones winner yesterday, as CEO John Chambers was quite upbeat over earnings and announced a plan to hire 3000 employees.
Toyota’s “missing” CEO gave an official apology today in . With regards to concerns over Greek sovereign default, an objective market participant always has to ask this question, are the fears overdone? Personally, I have no idea, but BTIG’s Mike O’Rourke (on Bloomberg TV at 9:15am and Fox Biz from 12pm-1pm today) provides a solid perspective on where Japan relates to other economies in global terms: Greece
We are having a hard time perceiving
’s problems as the end of the financial world. We are familiar with hysterics surrounding potential contagion, but to think that this is anything more than a momentum-oriented, hyped-up trading move, one would have to believe that a default is imminent. Even most of the market participants who are “concerned” do not think a default is likely in the short or long term. GDP of the Greek economy ranks somewhere between Greece Michigan’s and Ohio’s ( Portugal’s is a little larger than ). Another way to look at it is that the Greek economy is roughly equivalent to the market cap of Exxon back in November at its most recent peak. The Greek stock market’s market capitalization is only slightly more than Citigroup’s. Essentially, if you add the GDP of most of these countries together, they will equal the size of one systemic institution in the Maryland . Most S&P 500 companies have better balance sheets than most sovereigns, including the United States . The market and the media are enamored with the credit default swap market. It is remarkable how much attention can be given to the price of default protection for an entity that most believe will not default. United States
Mike is right, of course. In a true global sense,
is small potatoes. But when a market feels overextended, as ours has for some time, sometimes all it needs to correct is the threat of a fear – an excuse to sell off, as it were – rather than a true event. After all, there’s a reason that it’s called the straw that broke the camel’s back, and not the boulder that broke the camels back. It’s worth noting that much of the chatter out of Greece Europe – in terms of their investment community – is de-risking… Note that the G-7 meets for two days starting tonight – that may generate some headline statements over the weekend.
Brightpoint PreMarket (yest close/premkt/% change/volume):
S&P 500 PreMarket (last/% change prior close/volume):
AIR PRODS & CHEM 69.00 -6.36% 4468
TYSON FOODS-A 14.75 +5.43% 103873
MEMC ELEC MATER 12.06 +3.97% 190987
IAC/INTERACTIVEC 20.00 -3.71% 100
PERKINELMER INC 20.53 +3.58% 1000
PARKER HANNIFIN 53.43 -2.73% 200
MOTOROLA INC 6.48 +2.53% 89645
COACH INC 33.60 -2.52% 4825
Today’s Trivia: According to an article soon to be published by Men’s Health magazine, which is the “drunkest” (as measured by liver disease rates, number of DUIs, etc)
city? Which is the least? (Note – the results may shock you… my guess is that the city rated least is not less drunk at all, just better at hiding it…) U.S.
Yesterday's Answer: The Queen of England is prohibited from entering the House of Commons.
Best Quotes: Stole this from ResearchEdge this morning… "The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest
become bankrupt." - Rome , 55 BC Cicero
“Emerging market equity funds lost $1.6 billion in weekly withdrawals, the biggest outflows in 24 weeks, as earnings and
’s debt woes raised concerns that the global recovery may falter, EPFR Global said. Investors removed almost $1 billion from global emerging market stock funds in the week ended Feb. 3, the most in more than a year, and withdrew $516 million from Asian equities outside of Greece , the research company said in a statement.” --BBERG news Japan