The drama for the week reaches a crescendo in one hour's time when the Monthly Jobs Report hits at 8:30 AM EST. The consensus is 145K jobs (last month, March data, was 88K) with a steady unemployment rate at 7.6%. The revisions to last month's numbers are important. Also, watch the hours worked (34.6 last month), hourly earnings (0.0% last month) and labor participation rate (63.3% last month). Since the disappointing jobs number last month at a paltry 88K, on the bear side, companies have reported weaker sales and the sequester cuts continue to affect companies negatively. On the bullish side, Jobless Claims hit a five-year low yesterday so although companies may not be hiring, they appear to not be firing either. Factory Orders and ISM Non-Mfg data is released at 10 AM so markets will pivot on that news.
Commodities are up strongly again today wiping out Wednesday's dramatic drops. Futures are idling ahead of the jobs numbers. The weaker volatility, with VIX dropping under 14, creates bullishness for markets as evidenced yesterday. For the SPX today starting at 1598, the bulls only need to see positive futures and the SPX will be moving up through 1600 after the opening bell today. The bears need to push under 1583 to accelerate the downside. A move through 1584-1597 is sideways action today. The 8 MA is above the 34 MA on the 30-minute chart so the bulls are clearly in charge. The 10-year yield sits at 1.63%-1.64%. The Jobs Report will tell the story.
Note Added 8:35 AM: The Jobs Report sends the markets violently higher with the S&P futures now up +11. There are 165K jobs with a 7.5% (lowest since December 2008) rate. Hourly earnings are up 0.2% compared to flat last month but hours worked are 34.5 lower than last month. Labor participation rate remains flat at 63.3%. The big push higher in markets is due to the revisions. Last month's paltry 88K is revised to 138K and February was revised from 268K to 332K. The 332K is a multi-year high. The 10-year yield jumps to 1.69% as money runs into equities. S&P's are now +12, the Dow +110 and Nas +23. Looks like SPX 1600 is a done deal this morning. The bulls are benefiting on good news as well as bad news. The bad news is met with the realization that the Fed and BOJ will only increase their money printing so all news is viewed positively. Keystone's 80/20 rule says 8's lead to 2's, so it looks like the breach of 1580 should lead to the 1620's.
Note Added 8:50 AM: S&P's +11. Dow +106. Nasdaq +21. Crude oil 95.22. The 10-year yield is now at 1.70% regaining this psychological level. Gold 1465. Dollar/yen 99.07 (higher dollar/yen = weaker yen = higher equities). The euro is 1.3047 dropping back under 1.31.
Note Added 9:35 AM: The broad indexes are up strongly, the whistles and horns are sounding for SPX 1600, the first time it has printed in history. The data at 10 AM should create a pivot. The markets will need time to settle out this morning. SPX now moving towards 1614 with the shorts throwing in the towel. VIX is 12.85 under 13. TRIN is 0.65 confirming the uber bullishness.
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