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Pre-Market Primer: US Jobs Report Beats Expectations

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With another month of great jobs data, it's getting harder for the Republicans to make the economic case against Obama.

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Looks like another great day for everybody besides bears and Republicans who have to make the case that President Barack Obama is destroying the economy.

The US added 227,000 jobs in February, far more than the 210,000 that economists expected. The unemployment rate hit expectations on the nose, staying flat at 8.3%. The numbers for January, already a blockbuster month for employment, were revised up from 243,000 to 284,000. The participation rate actually rose 0.2%, showing that people are not giving up looking for jobs.

One little dark lining to the silver cloud is the long-term unemployed. The number of people who have been unemployed for more than 27 weeks didn't decrease, but stayed flat at 5.4 million. The long-term unemployed account for nearly half of all unemployed.

Basically, this is a very good sign for the US economy. Now Europe.

Greece's debt swap with private investors was more successful than hoped; 95.7% of bondholders agreed to the deal. Today, the eurozone's finance ministers met and finally approved a $47 billion rescue fund.

Before you pop that Champagne, wait until after the International Swaps and Derivatives Association decides whether a credit event has occurred. If the ISDA rules that the collective action clauses that force the private investors who didn't agree to the swap constitutes a credit event, credit default swaps will be triggered. CDS on Greek debt now cover $3.16 billion, down from $5.56 billion one year ago.

European markets are hardly changed from last night. Economic reports released today showed that European industrial production between December and January disappointed. British industrial production unexpectedly fell 0.4%, and production plummeted 2.5% in Italy. French factories increased output by 0.3%, slightly less than expected. German inflation came right in line with expectations, holding steady at an annualized 2.3% in February. European stocks are mixed, but hardly changed from the day before.

Industrial output in China slowed in the first two months of the year, increasing by 0.7%. Retail sales grew by 1.56%, slightly more than the 1.41% rise in the last two months of 2011. Chinese inflation slowed down to 3.2%. Asian equities rose on Friday.

US futures were virtually unchanged ahead of the big jobs report, and immediately shot up.
  • Dow (^DJI) futures rose 0.16% to 12,864.00.
  • S&P 500 (SPY) futures rose 0.21% to 1,363.40.
  • Nasdaq (^IXIC) futures are up 0.16% at 2,637.25.
The dollar gained on the yen and euro, and gold futures fell 0.39%. America's trade deficit increased to its largest since 2008. The US imported $52.6 billion more than it exported.

Starbucks (SBUX) announced that it will be making its own single-serve coffee pod machines. This is the most unkindest cut of all for Starbucks' partner, Green Mountain Coffee Roasters (GMCR). The patent for Green Mountain's Keurig single-serve coffee machines will expire soon. Thanks to new competition from the nipple-less mermaid, Green Mountain shares plunged 14% in the pre-market, while Starbucks gained 3.24%.

Gun maker Smith and Wesson (SWHC) posted better-than-expected earnings after the bell yesterday. Shares gained 6% in after-hours trading.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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