Buzz Bits: Dow, Nasdaq Close Lower
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Evaluation of the SPX with a low unemployment rate.... - Bennet Sedacca - 12:59 PM
Let me say this. the unemployment rate SEEMS too low to me given initial claims, housing data, retail data and GDP data. Could it be a dressed up number in front of the elections? Insidious, no? Well, it is possible in my book.
But check out this chart I dreamed up (after spending a night with the Sauts, Toddo and President Fish I guess one gains some smarts?). It plots the unemployment rate against the S&P. Pretty glaring I would say.
The last time the unemployment rate got here, stocks proceeded to fall 50%. Not calling for it, Minyans, just bringing it to your attention.
That is, if you buy the number, which I am skeptical of to be honest. But the bond market believes it as the 107 to 107-16 area in 10's gets tested. But a cycle low is forthcoming next week, so we'll have to see. But 'defined risk' here. Not stubborn...
Position in 10 year note.
Outta the Gate - Kevin Depew - 10:25 AM
- After a surging in the first half hour, note the Nasdaq-100 (NDX) coming sharply off its highs here.
- This has yet to affect the Russell 2000 (RUT), which is outperforming the S&P 500, up .45% to .16%, but would not a be a surprise as one lever pulls another. Watch closely, objects in mirror may be closer than they appear.
- Note the brokers slipping into the red here as well.
- Minyan Neal asks about the employment rate, "How can you have a lower amount of jobs added and have the rate go down?"
- Is it Friday yet?
- Ok, then, is it 4 yet?
Major Market Update - Tom Alexander - 9:23 AM
Yesterday's lows are critical for several reasons. The decline from the 10/26 high to Thursday's low was 2%, making it the largest decline since August. It bottomed in the High Volume Nodes of the most recent Balance Areas in the December S&P mini, the December Dow mini and the December Nasdaq mini. The December Russell was relatively weaker but also formed a low into structural support. Also, breadth reached a negative relative (relative to those that have occurred sine the rally began in July) extreme from where each pivot low has formed since the July low.
The caveat is IF it is different this time, none of the above will matter, and the present decline may accelerate (see the chart of the May decline). As I write this there appears to be another bullish resolution forming with the stock index futures trading sharply higher on the jobs report.
Dec. S&P mini: 1367.25
Dec. Dow mini: 120.08
Dec. Russell mini: 749.40-748
Dec, Naz mini: 1707.25
Dec. S&P mini: 1381.75-1383.75
Dec. Dow mini: 121.48-121.60
Dec. Russell mini: 765.30-768
Dec. Naz mini: 1734-1738
Massaged Statistics - John Succo - 9:13 AM
I don't pay much attention to "massaged" government statistics. With the birth/death jobs being 70k out of the 90k jobs created, who knows the truth?
Much more important is the New Century Financial (NEW) earnings report. NEW is a residential REIT. Pressures continue to build. Their guidance forward caused UBS to declare that a cut in their dividend is coming.
Our economy is backward. It is driven by borrowing and asset prices. In a normal and stable economy, consumers save money and corporations invest it. In our economy it is the corporations that are saving and consumers who are spending everything.
Position in NEW
What you need to know... - Jon Doctor J Najarian - 8:10 AM
Jobs Report – Will the Republicans get to crow about a lower unemployment rate and jobs growth, or will the Democrats be using a shortfall against incumbents? There's a lot riding on this report, due at 8:30 am ET. I am looking for 135,000 jobs, or 10,000 above Street estimates.
Microsoft (MSFT) To Work With Novell (NOVL) for Linux – Former bitter rivals are teaming up in a partnership that will allow the open source system (Linux) which is distributed by Novell, to work with Microsoft's Windows software. This is clearly a winner for both companies and a stab in the heart of Oracle (ORCL), which had just announced Linux support at last week's Open World in San Francisco .
Whole Foods (WFMI) Warns, Shares Toast! The natural and organic grocer said sales have slowed and will slow more in '07. Shares are already down from $80 to $60 over the past year and this morning I show them trading under $50, down 15% overnight! Oh yeah, the CEO also said and I quote, "our new Whole Foods locations are also taking sales from our older stores."
Gateway (GTW) announces 100 Job Cuts – The struggling computer maker will eliminate 100 jobs as part of a cost-cutting effort designed to save up to $35 million a year. The company, which also makes plasma TV sets and other electronic devices, said it will take a charge in the fourth quarter for severance costs.
Positions in NOVL, MSFT
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