Wednesday, January 6, 2010

Investors Awaiting Friday Jobs Data; Markets Churn

Another day passed on Wall Street with little or no movement in the major indices. Topping the outlook was anticipation of December Non-farm Payroll data, due out Friday morning, January 8, prior to the opening bell. A glimpse of what the numbers may look like was provided by the monthly private payroll report by ADP, which showed employers shedding another 84,000 jobs during December, a figure much improved over November's -145,000.

Considering that November Non-farm payrolls came in at the best levels in 16 months, showing a loss of only 11,000 jobs, the ADP report should have been reassuring to anyone looking for a better employment picture on Friday. Expectations are that the government will show a loss of between 25,000 and 45,000 jobs, though estimates are ranging even into positive territory. Much depends on prior month revisions, and also the method by which the december figures are compiled.

Some private sources contend that the government figures are fudged for political purposes, which would not be beyond imagination, while others point out that the raw numbers do not include the hordes of workers who have exhausted unemployment benefits and are no longer counted. True unemployment, including distressed workers, is estimated to be closer to 18% than the 10% with which the government has been flirting.

In any case, traders seemed tenuous with stocks trading in narrow ranges for the second straight day. While the NASDAQ finished in the red, the other major indices all posted positive numbers, though their gains were marginal, at best.

Dow 10,573.68, +1.66 (0.02%)
Nasdaq 2,301.09, -7.62 (0.33%)
S&P 500 1,137.14, +0.62 (0.05%)
NYSE Composite 7,377.70, +22.83 (0.31%)

Gainers edged out losers on the day, by roughly the same margin as Tuesday, 3548-2965. Once more, new highs seemed to be topping out, with 798 stocks reaching 52-week highs, while only 73 made new lows. Volume was solid again, though considering how little movement there was, churning was the operative word to describe the session. People are still waiting for unemployment data and further out, earnings reports.

NYSE Volume 5,517,178,000
Nasdaq Volume 2,269,902,500

Commodity prices were sharply higher, as oil reached another 15-month peak, gaining $1.41, to $83.18 per barrel. Gold soared another $18.30, to $1,137.00, while silver bounded ahead another 38 cents, to $18.18.

The signal coming from commodity traders is that of recovery and inflation, though equity participants are being cautious on the same news, figuring that those two economic elements will force the Fed to raise rates sooner, rather than later. The widespread consensus is that any rate hikes before June will kill off the rally, now in it's 10th month.

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