Thread: Market Talk / April 8th - 14th

Here is some good reading. Two different sides of the same coin.

http://www.cnbc.com/id/17983850

Market pros said a stronger-than-expected employment report released Friday lowers the chance of an interest rate cut by the Federal Reserve, which could send stocks lower on Monday following a long holiday weekend.
"Good news is bad news, it's a stronger number than some were hoping for because you don't want jobs to be picking up at this stage because inflation is becoming a problem," Marc Pado, chief market strategist at Cantor Fitzgerald, told CNBC.com. "The Fed's hands are truly tied at this point; this is telling you that there is no chance of a rate cut through the June meeting."
The Labor Department said payrolls grew by 180,000, well above the consensus economists' estimate of 135,000, while the unemployment rate moved to a five-month low of 4.4%.
"Part of this rally recently has been the market wanting to see a chance for easier money policies from the Fed," said Pado. "I think the market is going to react negatively and is set up for a pullback on Monday."

http://www.chicagotribune.com/busine...lumn?track=rss

Bill Barnhart
Good Friday gives extra day to gauge job data

Published April 5, 2007

It has been almost a year since the stock market seemed to notice the monthly job-growth report, which is issued on the first or second Friday morning of the following month by the Labor Department.

Since April 2006's report, issued May 5, the market has barely registered a reaction to one of the most important periodic indicators of economic trends by the end of the Friday trading session. The ability of investors to see past data blips is a good thing, but you have to worry that we're missing the forest by ignoring the trees.

The hypothesis of short-term market resilience or complacency, take your pick, might be challenged by the coming jobs report for March.

This week, active investors face the prospect of the news being released on a day when the stock market is closed. Aside from a Good Friday morning session for bonds, most traders will have to wait until Monday to react to the news.

Wednesday's trading suggested that investors are hugging the sidelines in advance of the news.

"There's some hesitancy ahead of that report," said Pat O'Hare, manager of investor content at Briefing.com. "It doesn't make sense to get aggressive ahead of the jobs report."

In previous episodes of Good Friday jobs reports, the Monday Wall Street session occasionally has been interesting, according to Bianco Research. The last time, in April 1999 (the March 1999 report), stocks rallied more than 2 percent the following Monday. The job-growth number was much less than expected, and traders cheered.

In the 1994 and 1996 Good Friday reports, job growth for March was much bigger than expected, prompting declines in stocks and bonds. The biggest Good Friday overshoot of the actual number from the forecast in recent decades occurred in 1994. The economy created 456,000 jobs in March that year. The average monthly growth in jobs in 1994 was 312,000. Bond prices swooned that year, as the Federal Reserve squeezed credit to fight inflation.

Indeed, the most interesting revelation in reviewing this incidental sidebar to stock market history is how low our expectations have sunk about the economy's ability to produce jobs. The average job growth posted on Good Fridays, going back to April 1985, was 257,000. The average of the last 12 months was 167,000, despite the growth of the U.S. population.

Economists, on average, predict that about 130,000 jobs were created last month, up from 97,000 in February, when the manufacturing sector lost 71,000 jobs.

There is room for a surprise to be digested Monday. Statistics show that March is the month of the greatest forecast errors. Friday's data will include evidence of the two biggest market issues in the headlines: the inflation outlook and the likelihood of slower economic growth.


or google http://www.google.com/search?hl=en&q...llowing+monday

http://www.briefing.com/GeneralConte...6091218PageOne

Payrolls Jump Should Support Stocks

Last Update: 06-Apr-07 09:12 ET

The March employment data should provide some support to the stock market on Monday. The data are strong across the board. This should ease concerns that weakness in the housing and manufacturing sectors will slow down consumer spending significantly. The down side of the report is that it is strong enough that it should also curtail lingering expectations that the Fed will ease interest rates any time soon.
March payrolls were up 180,000. As has become the standard practice, the prior month was also revised higher. February now shows a 113,000 gain compared to the original report of 97,000. The March gain is equivalent to a strong 1.6% annual rate of growth in the number of payroll positions to help fuel consumer spending. Additionally, hourly earnings were up 0.3% in March (actually 0.349%). The year-over-year increase held at 4.0%. The wage gains plus payroll growth is more than enough to sustain consumer spending at the current 3% real rate of growth. That will keep a floor under economic growth.
The report does have a down side. The Fed has consistently expressed concern about inflation risks associated with the "high level of resource utilization." This means the tight labor market. Higher wage growth could mean inflationary pressures.
In our opinion, the report today strongly reinforces our view that the Fed is not likely to cut interest rates any time soon. The stock market has not come to that conclusion, but if that does become the consensus view, that will limit the upside potential for the stock market. For now though, the net impact of the report should be positive. Forecasts that the weak housing market will lead to recession have taken another hit. - - Dick Green, Briefing.com.

Show,
Thanks for posting good in-depth reports. No doubt these are important for us to sort out what the market direction might be.

More news.

http://biz.yahoo.com/ap/070408/wall_...head.html?.v=2

[BRIEFING.COM] S&P futures vs fair value: +4.2. Nasdaq futures vs fair value: +7.2. The stage remains set for last week's winning streak to carry over into this morning's opening bell. With the Dow, S&P 500 and Nasdaq up 1.8% on average over the last four days of trading, with falling oil prices and M&A activity driving renewed buying interest, both are acting as additional catalysts behind what is shaping up to be a solid follow-through effort. Crude for May delivery is down nearly 1.0% at $63.65/bbl while Dow Chemical (DOW) is reportedly being eyed by a consortium of private investors prepared to make a $50 bln offer. That would mark the biggest LBO ever.

Oil may be down, but gasoline prices where I am jumped a lot over the weekend, now averaging $2.89 a gal.


Nationwide, gasoline prices are steady today, after spiking up on Friday:

http://gasbuddy.com/GB_Price_List.aspx

Is it just me, or is the Yahoo chart relative to the S fund a little off today?

Only 10 more points on the NYSE to go and we'll have another new all-time high. Previous high was 9453.93.

The Kingdom of TSP
Daily Edition
April 09, 2007 Closing

Yak, Le Charts, Doodles, Tea Leaves & The Tally Can

Kingdom Yak:
Pro-Yak....................................Well at least Krude retreated.

Con-Yak...................................50d MA is flat. Bands show volatility, volume was low and socks overbought.

Jester-Yak................................Uh oh!

Le Charts

Charts courtesy of www.stockcharts.com

Doodles:
Stops.......................................Alert (-1%)....Trail (-2%)
.....SPX........1444.61 +0.85.........1430.............1416

Dollar........................................83.0 8 +0.37 for the day.

Lube (NYMEX) Closed at...............61.51 -2.77 for the day.
Oil Markers.................................<60= ok, 60-65= worry, >65= panic.

Tea Leaves:
Yakndoodles...............................Yellow.

Tally Can
TSP Funds..................................G-fund, F-fund, C-fund, S-fund, I-fund.
Top 10 last 12 mo........................1.0 ......3.9 ......0.0 .....1.1 ......4.1
Today........................................4 made IFT(s), 49% bearish, 51% bullish.
Thursday....................................4 made IFT(s), 39% bearish, 61% bullish.

Trader Fred has some interesting comments this morning. Sounds like something is going to pop one way or the other. Stay nimble!

http://www.tsptalk.com/system.html

Briefing.com:
08:00 am : S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: +0.5. Early indications are pointing to a relatively flat start for stocks. That's not all that surprising, though, since there aren't any economic reports scheduled for release today and the first-quarter earnings season doesn't officially get underway until Alcoa (AA) releasing results after the bell tonight. Over the next few weeks investors will be closely watching to see how weakness in the housing and manufacturing sectors has impacted corporate growth. Expectations are for Q1 operating earnings for the S&P 500 in aggregate to increase only 3&#37; to 4% over the same quarter of 2006. That's the lowest level of growth in five years.