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Need to Know
MAY 03, 2013
6 gut checks before the stock market's
opening bell
By Shawn Langlois
Good
morning.
Chalk a big chunk of recent index gains up to Apple's run, but that doesn't
change the fact that the troublesome trend of defensive stocks leading the
rally has reversed in the past couple weeks.
With the Nasdaq charging through 12-year highs and the S&P
pushing into uncharted territory, it seems tech stocks are cool again . Unless you
consider LinkedIn a tech company. Then it's about to get baboon-butt ugly.
For the wonks out there, it's like Christmas. There was a palpable
excitement building over today's jobs number, a feeling NOT aptly captured
by Dan Greenhaus in his note last night: "The economy isn't good, job
creation isn't good, wage growth isn't good and forecasts aren't good. And
tomorrow's number shouldn't really change that."
Can't you just feel the electricity? The number came in well above
expectations, and it was initially met with a collective equity yawn,
before the buying started to perk up. Like we pointed out earlier: Good
news is good, but bad news is better for those hoping to keep milking the
Fed for some of that tasty stimulus.
Key market gauges: U.S. stocks are gathering some momentum,
with futures on the Dow and the S&P on the rise. Same is true in
Europe , where stocks are poised to close the week nicely higher
after yesterday's interest-rate cut decision from the ECB.
Shanghai , getting off the mat after recent declines, was a big winner in an otherwise weak showing
in Asia .
The economy: So, the U.S. economy created 165,000 jobs
in April and the unemployment rate fell to 7.5% from 7.6% even though the
size of the labor force increased. Add to that, hiring in March and
February were revised up by a combined 124,000. The increase in hiring in
April beat Wall Street's forecast. Economists surveyed by MarketWatch had
expected a 135,000 gain, with unemployment remaining at 7.6%. Uh oh, good
news? Drill down into the numbers .
We keep looking and worrying about signs of the recovery slowing, but
really, jobs growth has kept hammering along at a reasonable clip.
— Justin Wolfers (@justinwolfers) May 3, 2013
The buzz: LinkedIn isn't grabbing post-report
endorsements like Facebook , with its 5.6% pop, racked up yesterday. Shares
of LinkedIn are down more than 10% before the open after a soggy revenue outlook took the shine off
the online job site's explosive profit growth. Then again, the stock had to
be priced for perfection in light of the 62% pop since the last time it
reported.
Twitter is another one of Google's top business buzzwords this morning
after the company hired a woman who could turn out to be a pivotal step
towards an IPO . Other developments that kept the
microblogger in the news throughout the day included Warren Buffett joining
the fray , the Pope taking a shot at capitalism and Amanda Bynes
apparently losing a Solitaire version of strip poker
. As for Buffett, he's now the second-richest guy on Twitter, behind his buddy .
.@warrenbuffett
Welcome to @twitter
. What took you so long?
— Bill Clinton (@billclinton) May 2, 2013
Check out the seven richest people to get their
Twitter on.
The earnings sked is relatively light today, but if Berkshire Hathaway
keeps with its pattern of unveiling its financial numbers on the eve
of its annual shareholders meeting, we should see how Buffett and the boys
fared during the first quarter by the end of the day. Read: Stocks to watch .
BlackBerry is the top-trending ticker on StockTwits, with the stock
up 2% in premarket trading. The handheld device maker got a boost from the Pentagon , which approved
the use of its products on Department of Defense networks. Rival Apple
has yet to receive such clearance.
The chart of the day: If Business Insider, in its understated
wisdom, decides to blow this out as "the world's most beautiful stock market
indicator," I suppose it's at least worthy of a mention in
this section, especially with all the jobs attention today. Basically, the
lower the jobless claims the higher the S&P 500. "For years now,
the two lines have matched up perfectly," writes Joe Weisenthal.
"And it continues, as the stock market sits at record highs, while
initial claims fall to post-recession lows."
The
call of the day: The Market Anthropology blog is
pivoting somewhat on its outlook for another drop in the precious metals
sector. Now, it sees "a large countertrend bounce through May"
for silver . The writer of the "Hi ho silver" post calls it
a play on "the momentum structures" and the fact that it
dovetails with the blog's historic correlation with the Nikkei, as seen in
this chart.
Random
reads: Here's a story on the gay
athlete before Jason Collins, from The Atlantic . Then there's this guy from the MLS. While we're on the
soccer tip, check out David Luiz's utterly ridiculous goal for Chelsea last night,
and why Barcelona might be about to offer 40 million pounds for his services .
Ballmer's pathetic iPhone call and nine other tech forecasting howlers .
Since when is it a crime to buy rat meat, douse it in gelatin and red
pigment, and sell it as mutton? Apparently this practice is frowned upon in Shanghai , of all places.
Best think twice before you post a video of yourself twerking .
Flesh eating disease is one thing, liver failure is another. RIP Slayer guitar man .
Tonight one less star will be shining and sadly, the stage got just a
little bit darker. Jeff Hanneman 1964-2013.
— Dave Mustaine (@DaveMustaine) May 3, 2013
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