Apologies for limited note today…
Futures surge up 140bps following this morning’s employment data. The official Change in Nonfarm Payroll s was only -11k versus the -150k expectation. Additionally, the Unemployment Rate dropped to 10% even from 10.2%. October’s data was also revised for the better, to -111k from -190k observed. Also of note – the “real” Unemployment Rate, which includes discouraged workers and individuals working part-time, fell from 17.5% to 17.2%... Further, to this point in the morning, the inverse correlation between the USD and the SPX appears broken, as the dollar surges +50bps and S&P futures are higher as well. In corporate news, the largest secondary offering in nearly a decade priced last night, as BAC’s $19.3B priced at $15. In global news, the Canadian unemployment data was also much better-than-expected, as they added 79k jobs, which was 5x the expectation.
As of last night’s close, the DJIA is only 27% below the all-time high (14,000+) set in late 2007. I am admittedly surprised by that number. Given what we know now about the excess risk-taking and leverage then, would you expect that number to be higher or lower? This is an oversimplification of course, but does trimming 27% of excess fat from the “golden age” of credit represent fair value? Hmm. I would argue that we’d need to trim more from that time’s excesses – both financial and otherwise – to achieve fair value in fundamental economic terms.
CITI ups AKAM, RAI. CITI cuts AKS, NFLX. WEFA cuts ENDP, TTWO.
Brightpoint News:
Brightpoint PreMarket (yest close/premkt/% change/volume):
S&P 500 PreMarket (last/% change prior close/volume):
BIG LOTS INC 26.80 +13.85% 214234
GOODYEAR TIRE 14.38 +5.27% 50521
SUN MICROSYSTEMS 8.63 +4.86% 7707681
AKAMAI TECH 24.92 +4.84% 36250
MGIC INVT CORP 4.85 +4.75% 50010
MBIA INC 3.80 +3.83% 40662
REGIONS FINANCIA 5.70 +3.64% 162703
KEYCORP 6.07 +3.58% 12136
GENWORTH FINANCI 11.70 +3.54% 22024
MARSHALL &ILSLEY 5.65 +3.48% 4500
GANNETT CO 10.19 +3.45% 200
FANNIE MAE .930 +3.33% 110784
PROLOGIS 13.64 +3.02% 4336
ZIONS BANCORP 12.97 +3.02% 9189
Today’s Trivia: Who has won the World Cup the most times, and – for the bonus points – what years? (Submitted by Adrian VDB, who claimed my US States question was too “provincial.”)
Yesterday's Answer: “Live Free or Die” = New Hampshire Maryland New York Montana
Best Quotes: “In the standoff between shoppers who are looking for great deals and retailers who have slashed inventory to boost sales of full-price merchandise, it looks like the shoppers won in the month of November; as evidenced by the lower-than-expected same-store sales at major retailers.” -WSJ
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