Friday, January 7, 2011

Morning Note...

Better late than never…

Futures open slightly higher this morning (+15bps) after earlier weakness on the back of yesterday’s relatively disappointing December Retail Sales data and this morning’s weaker-than-expected December jobs data.  The official Change in Nonfarm Payrolls came in at +103k vs. the +150k expectation, although the Unemployment Rate dipped to 9.4% from the prior 9.8% reading.  Overseas, European markets are slightly lower (-10bps) and the EUR/USD (1.2974) remains under the 200-day moving average (1.3080) and the psychological 1.30 level.  Asia was mixed but mostly flat overnight.  Oil +60bps.  Gold -30bps.  USD +7bps. 

Interesting Bernanke commentary hit the tape on the open this morning:

Bernanke Sees Slow Drop in Joblessness Even With Growth Pickup 2011-01-07 14:30:00.12 GMT

Jan. 7 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the decline in the unemployment rate is likely to be slow even with a pickup in U.S. growth this year, signaling no change in the central bank’s monetary stimulus. At the pace of improvement projected by Fed officials, “it could take four to five more years for the job market to normalize fully,” Bernanke said today in prepared testimony to the Senate Budget Committee. Bernanke also stepped up the urgency of his call for a plan to reduce the federal budget deficit, saying “prompt adoption” of one could have economic benefits in the long and short run. The Fed chief is defending his unorthodox program of buying $600 billion of Treasuries through June to meet the Fed’s mandates for full employment and stable prices. He spoke an hour after the government reported U.S. employers added 103,000 workers to payrolls last month, less than forecast by economists. The jobless rate fell to 9.4 percent from 9.8 percent, reflecting gains in jobs and fewer people in the labor force. “In a situation in which unemployment is high and expected to remain so and inflation is unusually low,” the Federal Open Market Committee “would normally respond by reducing its target for the federal funds rate,” Bernanke said in his first public remarks on Capitol Hill since September. Instead, with the rate close to zero since December 2008, the Fed is buying securities in an effort to keep market borrowing costs low, he said, building on the first round of $1.7 trillion in debt purchases that “appeared to be successful in influencing longer-term interest rates, raising the prices of equities and other assets, and improving credit conditions more broadly, thereby helping stabilize the economy and support the recovery.”

BGP in restructuring talks with JEFF.  GSCO ups DO.  CITI ups GT.  KBH higher on earnings.  OPCO ups KLIC.  JPHQ ups PHG.  SCHN lower on earnings.  VLTR lowers guidance.  WEFA & DBAB upgrade SYNT.  XRTX earnings miss.  
S&P 500 PreMarket 8:30am (last/% change prior close/volume): 
Best Quotes:  Adios…