Friday was a fitting end of the week for stocks, a the BLS released some very sketchy employment data that sent investors initially to the sell windows, shedding stocks that have run up nicely over the past two sessions.
The week included two rather large down days followed by a pair of higher sessions and Friday's slight sell-off. The Labor Department reported that the US gained 80,000 jobs in its monthly non-farm payroll release, 104,000 of which came from the private sector, offset by 24,000 government job losses.
There were a number of revisions - all upward - to September and August data. September non-farm private payrolls, originally pegged at 137,000 job gains, was revised to 191,000. August, originally reported at a flat zero, was revised for a second time, adding in another 57,000 job gain, following last month's 47,000 upward revision, making August a much better month for employment - if one is inclined to believe government data, of which everyone is not - at a net jobs gain of 107,000.
Disappointing results at the outset sent stocks to their lows of the day in early trading, but as traders digested the data, found some reason for optimism, mostly in the revisions, and, though October's gains were not enough to keep pace with natural labor force growth (roughly 125,000 a month is needed), another positive month, on top of other positive economic data, was enough to erase those losses as the session wore on.
Catching up on other data releases, third quarter productivity increased by an estimated 3.1% after two consecutive quarterly declines.
Factory orders increased by 0.3% in October, on expectations of -0.5%, and the ISM services index inched lower, to 52.9, from 53.0 in September.
The official unemployment rate was pegged at 9.0, down from 9.1 in September, though most of the decline was due to job seekers falling off unemployment roles rather than finding new employment.
Another factor in the calculation of the overall strength or weakness of the US labor market comes in the form of the BLS' notorious birth/death adjustment, which measures the number of businesses closing and shedding jobs (death) and new business start-ups adding jobs (birth). According to this arcane, rather sloppy assessment, the BLS concludes that 103,000 more jobs were created in October by new businesses than were destroyed by business closures. In other words, almost all of the private sector job gains in October were statistically generated, which is why there is some doubt to the veracity and reliability of government statistics.
In Cannes, France, leaders of the G20 nations concluded a meeting without offering any new IMF funds to help Europe deal with its lengthy debt crisis. The fact that the member nations effectively told Europe to "fix it yourself" was less of a surprise than the IMF putting Italy under monitoring of its pension, privatization and labor reforms, long overdue.
That the leading economic powers of the world would defer to next year a decision on whether Europe needed additional help could be viewed as a positive development, especially after the referendum in Greece on that country's bailout money was effectively shut down on Thursday.
For the week, the Dow lost 248 points, the NASDAQ shed 51 points and the S&P dropped 32 points.
Dow 11,983.24, -61.23 (0.51%)
NASDAQ 2,686.15, -11.82 (0.44%)
S&P 500 1,253.23, -7.92 (0.63%)
NYSE Composite 7,552.23, -52.91 (0.70%)
NASDAQ Volume 1,959,105,000.00
NYSE Volume 3,947,110,000
Combined NYSE & NASDAQ Advance - Decline: 2093-2430
Combined NYSE & NASDAQ New highs - New lows: 73-59
WTI crude oil: 94.43, +0.17
Gold: 1,756.10, -9.00
Silver: 34.08, -0.41
Friday, November 4, 2011
Thursday, November 3, 2011
Stocks Rally in Spite of Global Issues
My apologies for the extreme brevity of this post, but seriously, no time today. - FR
Stocks, after a brief decline at the open, went straight up all day, almost without pause. Even the threat of Greece defaulting didn't allay the bulls. It was remarkable, in the face of so many financial headwinds.
Dow 12,044.47, +208.43 (1.76%)
NASDAQ 2,697.97, +57.99 (2.20%)
S&P 500 1,261.15, +23.25 (1.88%)
NYSE Composite 7,604.97, +143.81 (1.93%)
NASDAQ Volume 2,081,688,750.00
NYSE Volume 4,664,793,500
Combined NYSE & NASDAQ Advance - Decline: 4290-1341
Combined NYSE & NASDAQ New highs - New lows: 87-64
WTI crude oil: 94.07 +1.56
Gold: 1,765.10, +35.50
Silver: 34.50. +0.56
Stocks, after a brief decline at the open, went straight up all day, almost without pause. Even the threat of Greece defaulting didn't allay the bulls. It was remarkable, in the face of so many financial headwinds.
Dow 12,044.47, +208.43 (1.76%)
NASDAQ 2,697.97, +57.99 (2.20%)
S&P 500 1,261.15, +23.25 (1.88%)
NYSE Composite 7,604.97, +143.81 (1.93%)
NASDAQ Volume 2,081,688,750.00
NYSE Volume 4,664,793,500
Combined NYSE & NASDAQ Advance - Decline: 4290-1341
Combined NYSE & NASDAQ New highs - New lows: 87-64
WTI crude oil: 94.07 +1.56
Gold: 1,765.10, +35.50
Silver: 34.50. +0.56
Wednesday, November 2, 2011
Markets Rebound as Fed Stands Pat; Greece in a Bind over Bailout
Dow 11,836.04, +178.08 (1.53%)
NASDAQ 2,639.98, +33.02 (1.27%)
S&P 500 1,237.90, +19.62 (1.61%)
NYSE Compos 7,461.10, +123.96 (1.69%)
NASDAQ Volume 1,942,050,875
NYSE Volume 4,062,845,250
Combined NYSE & NASDAQ Advance - Decline: 4528-1072
Combined NYSE & NASDAQ New highs - New lows: 47-45
WTI crude oil: 92.51, +0.32
Gold: 1,729.60, +17.80
Silver: 33.94, +1.21
Recapping the days events in no-frills fashion:
German Chancellor Angela Merkel and French President Nicolas Sarkozy met with the IMF and Greece's Prime Minister George Papandreou to discuss the Greek leader's abrupt call for a national referendum on whether or not to accept the Euro bailout and associated austerity measures. According to early, unconfirmed reports, Papandreou would not budge on a plebesite early next year, pushing the EU leaders to issue a freeze on Greece's $8 billion in bailout funds, a move which could send the whole European debt crisis into a new, more dangerous phase as the Greek government will surely run out of cash prior to the proposed referendum.
The Federal Reserve chose to take no policy action on the federal funds rate, keeping the effective rate between 0.25% and zero. The Fed added some language to its statement, highlighting more positive tones as the US economy gathered steam in the 3rd quarter.
The ADP private payroll survey estimated that US employers added 110,000 private sector jobs in the month of October, after a revised 116,000 job gains in September.
Stocks ended a two-day losing streak, though the Fed's announcement and subsequent news conference didn't move markets much in either direction.
Volatility remains quite high, with the S&P Volatility Index (^VIX) ending the day at 32.74.
All interest will turn to employment over the next two days, as unemployment claims are announced Thursday morning and the BLS' non-farm payroll data come out on Friday, both releases timed for prior to the markets' opening bell. Continuing news from Europe is also likely to be at the top of investor interest.
NASDAQ 2,639.98, +33.02 (1.27%)
S&P 500 1,237.90, +19.62 (1.61%)
NYSE Compos 7,461.10, +123.96 (1.69%)
NASDAQ Volume 1,942,050,875
NYSE Volume 4,062,845,250
Combined NYSE & NASDAQ Advance - Decline: 4528-1072
Combined NYSE & NASDAQ New highs - New lows: 47-45
WTI crude oil: 92.51, +0.32
Gold: 1,729.60, +17.80
Silver: 33.94, +1.21
Recapping the days events in no-frills fashion:
German Chancellor Angela Merkel and French President Nicolas Sarkozy met with the IMF and Greece's Prime Minister George Papandreou to discuss the Greek leader's abrupt call for a national referendum on whether or not to accept the Euro bailout and associated austerity measures. According to early, unconfirmed reports, Papandreou would not budge on a plebesite early next year, pushing the EU leaders to issue a freeze on Greece's $8 billion in bailout funds, a move which could send the whole European debt crisis into a new, more dangerous phase as the Greek government will surely run out of cash prior to the proposed referendum.
The Federal Reserve chose to take no policy action on the federal funds rate, keeping the effective rate between 0.25% and zero. The Fed added some language to its statement, highlighting more positive tones as the US economy gathered steam in the 3rd quarter.
The ADP private payroll survey estimated that US employers added 110,000 private sector jobs in the month of October, after a revised 116,000 job gains in September.
Stocks ended a two-day losing streak, though the Fed's announcement and subsequent news conference didn't move markets much in either direction.
Volatility remains quite high, with the S&P Volatility Index (^VIX) ending the day at 32.74.
All interest will turn to employment over the next two days, as unemployment claims are announced Thursday morning and the BLS' non-farm payroll data come out on Friday, both releases timed for prior to the markets' opening bell. Continuing news from Europe is also likely to be at the top of investor interest.
Tuesday, November 1, 2011
Greece, Italy Send Stocks Overboard Again
Doings on the Continent have been keeping traders on their toes for months, but today's antics bordered on the bizarre.
First Greek Prime Minister George Papandreou called for a public referendum on the latest bailout plan, just approved days ago in late-night negotiations by European leaders. Making matters even more confused, Papandreaou scheduled the referendum for some time early next year, which would hold global markets hostage for months while the Greeks decide their own fate.
A "NO" vote on the austerity plans tied to Greece receiving more funds from the EU and IMF, would scuttle months of planning and negotiations and would likely result in Greece being tossed from the European Union. Such an outcome would surely roil markets terribly, though the mere thought of waiting two to three months for what almost certainly would be a negative result sent shock waves through European bourses and US exchanges today.
Reacting to the news, German Chancellor Angela Merkel and French President Nicolas Sarkozy planned emergency talks with leaders of the EU and the IMF, though it was not clear whether Mr. Papandreou would be invited.
And, if Greece's gambit wasn't enough to turn investors away, there's a confidence vote set for Friday, in which Papandreou's Socialist Party could lose control of the government, which it holds by only two seats in the parliament. The situation in the Mediterranean nation have moved from bad to worse to bizarre over the past few months.
In Italy, despite the agreements worked out last week, bond yields continued to spike higher, with the 10-year Italian bond reaching upwards of 6.22%, a more than 400-basis point difference over the stable German Bund. The bond spread blowout added to fears that Italy might be in more danger than previously thought - which, in itself was already severe - as the Italian government has to roll over nearly $2 trillion in bonds over the next year, a hefty sum.
Under the leadership - if one can call it such - of Prime Minister Silvio Berlusconi, Italy has failed to act on measures set down by the EU in August and leaders of two main banking and business associations have called on the prime minister to act swiftly or step aside. For his part, Berlusconi has made promises to act quickly, though many doubt he has the emotional or political will to implement the harsh austerity measures called for by other European leaders. As can-kicking goes, Berlusconi is world class, a foot-dragger with a penchant for putting off the obvious, though most of the other leaders in the EU have displayed similar inability to act courageously or quickly.
Also nagging US markets was the early-in-the-day report on ISM Manufacturing Index, which showed a marked decline, from 51.6 in September to 50.8 in October, another sign that the US economy was in danger of falling into another recession.
Stocks were pounded right from the opening bell, though a late day rally was attempted and then scuttled as news from Greece suggested more of a guessing game than any kind of deliberate policy action.
Speaking of policy, the Federal Reserve is locked in meetings on rate policy, which will be announced at 12:30 pm Wednesday, a deviation from the usual 2:15 pm time. The policy decision will be followed by a press conference with Fed Chairman Ben Bernanke. While it is virtually assured that the Fed will not change the federal funds rate from levels approaching zero, some are betting that another round of QE will be announced in some form, though the effectiveness of such an undertaking - already tried twice since the 2008 financial crisis, without effect - is very much in doubt.
Prior to that, ADP will release its private payroll data for October, which serves as a proxy for the "official" non-farm payroll data release by the Labor Dept. on Friday.
Not surprisingly, some of the biggest losers on the day were the large banks, such as Wells-Fargo (WFC), Bank of America (BAC), JP Morgan Chase (JPM), Citigroup (C) and Goldman Sachs (GS), the usual culprits now caught between a sagging economy, exposure to Europe and the unwinding of MF Global, which filed for bankruptcy protection on Monday.
The silver lining for consumers came from a two-day rally in the dollar - mainly against the Yen and Euro - sending commodity prices lower across the entire complex.
Dow 11,657.96, -297.05 (2.48%)
NASDAQ 2,606.96, -77.45 (2.89%)
S&P 500 1,218.28, -35.02 (2.79%)
NYSE Composite 7,338.48, -226.55 (2.99%)
NASDAQ Volume 2,314,571,500
NYSE Volume 5,656,978,000
Combined NYSE & NASDAQ Advance - Decline: 859-4813
Combined NYSE & NASDAQ New highs - New lows: 24-89 (flipped)
WTI crude oil: 92.19, -1.00
Gold: 1,711.80, -13.40
Silver: 32.73, -1.62
First Greek Prime Minister George Papandreou called for a public referendum on the latest bailout plan, just approved days ago in late-night negotiations by European leaders. Making matters even more confused, Papandreaou scheduled the referendum for some time early next year, which would hold global markets hostage for months while the Greeks decide their own fate.
A "NO" vote on the austerity plans tied to Greece receiving more funds from the EU and IMF, would scuttle months of planning and negotiations and would likely result in Greece being tossed from the European Union. Such an outcome would surely roil markets terribly, though the mere thought of waiting two to three months for what almost certainly would be a negative result sent shock waves through European bourses and US exchanges today.
Reacting to the news, German Chancellor Angela Merkel and French President Nicolas Sarkozy planned emergency talks with leaders of the EU and the IMF, though it was not clear whether Mr. Papandreou would be invited.
And, if Greece's gambit wasn't enough to turn investors away, there's a confidence vote set for Friday, in which Papandreou's Socialist Party could lose control of the government, which it holds by only two seats in the parliament. The situation in the Mediterranean nation have moved from bad to worse to bizarre over the past few months.
In Italy, despite the agreements worked out last week, bond yields continued to spike higher, with the 10-year Italian bond reaching upwards of 6.22%, a more than 400-basis point difference over the stable German Bund. The bond spread blowout added to fears that Italy might be in more danger than previously thought - which, in itself was already severe - as the Italian government has to roll over nearly $2 trillion in bonds over the next year, a hefty sum.
Under the leadership - if one can call it such - of Prime Minister Silvio Berlusconi, Italy has failed to act on measures set down by the EU in August and leaders of two main banking and business associations have called on the prime minister to act swiftly or step aside. For his part, Berlusconi has made promises to act quickly, though many doubt he has the emotional or political will to implement the harsh austerity measures called for by other European leaders. As can-kicking goes, Berlusconi is world class, a foot-dragger with a penchant for putting off the obvious, though most of the other leaders in the EU have displayed similar inability to act courageously or quickly.
Also nagging US markets was the early-in-the-day report on ISM Manufacturing Index, which showed a marked decline, from 51.6 in September to 50.8 in October, another sign that the US economy was in danger of falling into another recession.
Stocks were pounded right from the opening bell, though a late day rally was attempted and then scuttled as news from Greece suggested more of a guessing game than any kind of deliberate policy action.
Speaking of policy, the Federal Reserve is locked in meetings on rate policy, which will be announced at 12:30 pm Wednesday, a deviation from the usual 2:15 pm time. The policy decision will be followed by a press conference with Fed Chairman Ben Bernanke. While it is virtually assured that the Fed will not change the federal funds rate from levels approaching zero, some are betting that another round of QE will be announced in some form, though the effectiveness of such an undertaking - already tried twice since the 2008 financial crisis, without effect - is very much in doubt.
Prior to that, ADP will release its private payroll data for October, which serves as a proxy for the "official" non-farm payroll data release by the Labor Dept. on Friday.
Not surprisingly, some of the biggest losers on the day were the large banks, such as Wells-Fargo (WFC), Bank of America (BAC), JP Morgan Chase (JPM), Citigroup (C) and Goldman Sachs (GS), the usual culprits now caught between a sagging economy, exposure to Europe and the unwinding of MF Global, which filed for bankruptcy protection on Monday.
The silver lining for consumers came from a two-day rally in the dollar - mainly against the Yen and Euro - sending commodity prices lower across the entire complex.
Dow 11,657.96, -297.05 (2.48%)
NASDAQ 2,606.96, -77.45 (2.89%)
S&P 500 1,218.28, -35.02 (2.79%)
NYSE Composite 7,338.48, -226.55 (2.99%)
NASDAQ Volume 2,314,571,500
NYSE Volume 5,656,978,000
Combined NYSE & NASDAQ Advance - Decline: 859-4813
Combined NYSE & NASDAQ New highs - New lows: 24-89 (flipped)
WTI crude oil: 92.19, -1.00
Gold: 1,711.80, -13.40
Silver: 32.73, -1.62
Monday, October 31, 2011
MF Global Bankruptcy, Bank of Japan Send Stocks Reeling
Anyone who assumed that equity markets would behave after last week's Eurofix found out today what a sadly mistaken assumption that is. Stocks fell right from the opening bell, stabilizing about two percent lower, but capitulating in the final minutes of trading to end near session lows.
Part of the catalyst for selling stocks was the widespread appreciation that not all of Europe's problems are solved, but also the trading suspension and subsequent bankruptcy filing by MF Global (MF), a primary dealer run by former Goldman Sachs CEO, former New Jersey governor and regular Bilderberg atterndee, Jon Corzine. (Yes, it's true, the rich do sometimes eat their own.)
The firm was under pressure recently after having made sizable investments in risky European sovereign bonds, many of which have blown up and become worth much less than what MF Global had paid.
A swell fact box from Reuters shows that MF Global is the 7th largest bankruptcy since 1980, though it's probable that any bankruptcies prior to that date are smaller than #15, IndyMac, which went bust for $32.73 billion in 2008. Also worth noting is that 13 of the 15 occurred after 2000, and three of the top four happened in 2008-2009. So, the question of whether MF Global's little $41.05 billion will cause consternation and contagion, and, if so, how much?
The bankruptcy filing showed Corzine's firm listing as its largest unsecured creditors, JP Morgan Chase (JPM) $1.2 billion and Deutsche Bank about $1 billion.
With Europe still unsettled despite the outline of plans being trotted out last week (and the market rallying strongly), there's still plenty of counterparty risk whisking around the toilet bowl of global debt and MF Global, being a primary dealer, had all the advantages one could dream of and still went up in flames.
Adding to Monday's melodrama was the poor report from the Chicago PMI, which came in at 58.4 for October after a 60.4 reading in September, yet another sign that the US economy may not be doing as well as some might imagine.
The Bank of Japan intervened in its own currency, selling yen and buying US dollars. This sent the dollar soaring and the yen plummeting, in a move the Japanese central bank hopes would improve conditions for the nation's exporters. The follow-on was a crashing Euro, which confounded forex traders after the Euro had risen dramatically against the dollar over the past three weeks. Along with US stocks, commodity prices were mostly lower.
While the kick-off of the week was a rapid reversal of fortune after the extended bull rally of the past four to five weeks, there is certain to be more fireworks ahead. The Federal Reserve begins a two-day meeting on Tuesday, with a rate policy announcement due Wednesday. Hints that the Fed may embark on another round of QE have been circulating, though Fed members have not been forthcoming with details. There is also a bevy of economic data releases scheduled, with October Private Payroll data from ADP and crude inventories on Wednesday, unemployment claims, third quarter productivity, October factory orders and ISM Services on Thursday, prior to the Friday announcement from the Labor Department on non-farm payrolls for October.
With this kind of beginning, the markets will need some stroong economic data to stave off another batch of selling into perceived strength.
Dow 11,955.01 276.10 (2.26%)
NASDAQ 2,684.41 52.74 (1.93%)
S&P 500 1,253.30 31.79 (2.47%)
NYSE Compos 7,563.38 240.56 (3.08%)
NASDAQ Volume 1,788,364,125.00
NYSE Volume 4,310,269,000
Combined NYSE & NASDAQ Advance - Decline: 1125-4532
Combined NYSE & NASDAQ New highs - New lows: 59-39
WTI crude oil: 93.19, -0.13
Gold: 1,725.20, -22.00
Silver: 34.35, -0.93
Part of the catalyst for selling stocks was the widespread appreciation that not all of Europe's problems are solved, but also the trading suspension and subsequent bankruptcy filing by MF Global (MF), a primary dealer run by former Goldman Sachs CEO, former New Jersey governor and regular Bilderberg atterndee, Jon Corzine. (Yes, it's true, the rich do sometimes eat their own.)
The firm was under pressure recently after having made sizable investments in risky European sovereign bonds, many of which have blown up and become worth much less than what MF Global had paid.
A swell fact box from Reuters shows that MF Global is the 7th largest bankruptcy since 1980, though it's probable that any bankruptcies prior to that date are smaller than #15, IndyMac, which went bust for $32.73 billion in 2008. Also worth noting is that 13 of the 15 occurred after 2000, and three of the top four happened in 2008-2009. So, the question of whether MF Global's little $41.05 billion will cause consternation and contagion, and, if so, how much?
The bankruptcy filing showed Corzine's firm listing as its largest unsecured creditors, JP Morgan Chase (JPM) $1.2 billion and Deutsche Bank about $1 billion.
With Europe still unsettled despite the outline of plans being trotted out last week (and the market rallying strongly), there's still plenty of counterparty risk whisking around the toilet bowl of global debt and MF Global, being a primary dealer, had all the advantages one could dream of and still went up in flames.
Adding to Monday's melodrama was the poor report from the Chicago PMI, which came in at 58.4 for October after a 60.4 reading in September, yet another sign that the US economy may not be doing as well as some might imagine.
The Bank of Japan intervened in its own currency, selling yen and buying US dollars. This sent the dollar soaring and the yen plummeting, in a move the Japanese central bank hopes would improve conditions for the nation's exporters. The follow-on was a crashing Euro, which confounded forex traders after the Euro had risen dramatically against the dollar over the past three weeks. Along with US stocks, commodity prices were mostly lower.
While the kick-off of the week was a rapid reversal of fortune after the extended bull rally of the past four to five weeks, there is certain to be more fireworks ahead. The Federal Reserve begins a two-day meeting on Tuesday, with a rate policy announcement due Wednesday. Hints that the Fed may embark on another round of QE have been circulating, though Fed members have not been forthcoming with details. There is also a bevy of economic data releases scheduled, with October Private Payroll data from ADP and crude inventories on Wednesday, unemployment claims, third quarter productivity, October factory orders and ISM Services on Thursday, prior to the Friday announcement from the Labor Department on non-farm payrolls for October.
With this kind of beginning, the markets will need some stroong economic data to stave off another batch of selling into perceived strength.
Dow 11,955.01 276.10 (2.26%)
NASDAQ 2,684.41 52.74 (1.93%)
S&P 500 1,253.30 31.79 (2.47%)
NYSE Compos 7,563.38 240.56 (3.08%)
NASDAQ Volume 1,788,364,125.00
NYSE Volume 4,310,269,000
Combined NYSE & NASDAQ Advance - Decline: 1125-4532
Combined NYSE & NASDAQ New highs - New lows: 59-39
WTI crude oil: 93.19, -0.13
Gold: 1,725.20, -22.00
Silver: 34.35, -0.93
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