Need to Know
JUNE 07, 2013
6 gut checks before the stock market's opening bell
By Shawn Langlois
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Shutterstock
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Good morning.
The market's QE conundrum ruled the early morning, with guesses flying. What exactly did we want out of this critical jobs report? Hoping for some disappointing numbers didn't feel quite right. Almost dirty. Like having to pick a team when the Yankees play the Dodgers.
The number came in at 175,000, above expectations, and perhaps not to much to freak out people over imminent tapering. The futures market is yawning.
Ahead of the release, investors trying to wring every bit of profit out of this market -- economy be damned -- would have loved nothing more than an ugly report that supported continued stimulus. Check out our poll results .
By that logic, however, disappointing ADP jobs figures from earlier this week should have set off a buying spree. Instead, we got a nasty 217-point plunge on the Dow.
Goldman Sachs economist Jan Hatzius, who nailed the number, echoed the common refrain a day earlier: "A strong report would sharply reinforce these fears, and a weak one would relieve them substantially," he says. Despite Bernanke and his "next few meetings" thunderbolt last month, Hatzius said September is likely the earliest date of any sort of easing pullback.
The market's QE conundrum ruled the early morning, with guesses flying. What exactly did we want out of this critical jobs report? Hoping for some disappointing numbers didn't feel quite right. Almost dirty. Like having to pick a team when the Yankees play the Dodgers.
The number came in at 175,000, above expectations, and perhaps not to much to freak out people over imminent tapering. The futures market is yawning.
Ahead of the release, investors trying to wring every bit of profit out of this market -- economy be damned -- would have loved nothing more than an ugly report that supported continued stimulus. Check out our poll results .
By that logic, however, disappointing ADP jobs figures from earlier this week should have set off a buying spree. Instead, we got a nasty 217-point plunge on the Dow.
Goldman Sachs economist Jan Hatzius, who nailed the number, echoed the common refrain a day earlier: "A strong report would sharply reinforce these fears, and a weak one would relieve them substantially," he says. Despite Bernanke and his "next few meetings" thunderbolt last month, Hatzius said September is likely the earliest date of any sort of easing pullback.
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Nomura
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Regardless of how today's results
are ultimately interpreted, there are three more jobs reports before his
September target. Lots can change over that time, so check your heart rate.
Let's not lose our minds over this one, even if it is the "most important payroll release in years,"
as BofA's Michael Hartnett claims.
Jani Ziedins from the Cracked Market blog scoffs at that notion. He's more concerned with how yesterday's bounce has put the bears on the defensive . "After a couple of hours it will be long forgotten and we will resume trading the supply-and-demand skew," he wrote.
With a mostly muted reaction, Ziedins might be right.
Key market gauges: Futures on the Dow and the S&P are moving higher, with investors giving an unexcited nod to the jobs number.
Gold losing ground and its gains for the week could be in jeopardy. Europe isn't showing much of anything this morning, also holding its breath even after the hotly anticipated number hit the tape. Read European stocks .
Unlike the Dow yesterday, the Nikkei failed to avoid a three-day losing streak today, closing down just fractionally after a trading day marked by wide swings. Bear market time ? Shanghai stocks were hit the hardest of Asia's major indexes, off more than 1% to extend their losing streak to seven days. Read: Asian stocks drop on caution over U.S. jobs data .
The Nikkei chart will be a great Christmas card by year end pic.twitter.com/x2gpBE8qPW
— Ivan The Terrible (@SqueezedEquity) June 7, 2013
The economy:It's "Jobs Report Friday!" and everything else pretty much takes a back seat. Economists polled by MarketWatch were looking for the Labor Department to tell us that 164,000 jobs were created in May , down a bit from 165,000 in April. Instead, they got 175,000. Read more from Capitol Report .
The buzz: It doesn't look like this NSA "Big Brother" surveillance maelstrom is going away anytime soon. Google , Facebook and Apple are now being mentioned and the paranoia is running high. Read more about "the U.S. government's Internet espionage super operation."
In digital era, privacy must be a priority. Is it just me, or is secret blanket surveillance obscenely outrageous? http://t.co/KONSBtTWjc
— Al Gore (@algore) June 6, 2013
While the New York Times quietly pushed through its "on this issue" edit , Michael Arrington didn't mince words . "It's Orwellian and it kills liberty and freedom on a scale never seen before. It's not a way to stop terrorism. It IS terrorism," he wrote. Suddenly, Google Glass doesn't sound so bad.
Now we know what they were toasting. #PRiSM pic.twitter.com/9GS7beG0MY
— Bespoke (@bespokeinvest) June 7, 2013
Samsung shares are in the tank this morning after J.P. Morgan Chase cut its profit estimates for the world's biggest smartphone maker. BlackBerry is also trending on StockTwits.
Investors are still trying to figure out what to do with SodaStream after yesterday's buyout/no buyout, rumor-mongering roller coaster . The stock, which only managed to tack on 3% yesterday, is inching north premarket.
Quiksilver and Vail Resorts are worth keeping an eye on when the bell rings. Quicksilver is getting creamed on its quarterly report while Vail could be looking at a weaker open, as well. Read: Stocks to watch .
The chart of the day: Remember all those headlines when the Nikkei caught the Dow? Well, the pairing, which was much more common a few years ago, didn't last long. The two have diverged in a big way. Look at this chart from Ed Yardeni . Since meeting on May 21, the Dow has lost 2.8% while the Nikkei has dropped 16.7%.
Jani Ziedins from the Cracked Market blog scoffs at that notion. He's more concerned with how yesterday's bounce has put the bears on the defensive . "After a couple of hours it will be long forgotten and we will resume trading the supply-and-demand skew," he wrote.
With a mostly muted reaction, Ziedins might be right.
Key market gauges: Futures on the Dow and the S&P are moving higher, with investors giving an unexcited nod to the jobs number.
Gold losing ground and its gains for the week could be in jeopardy. Europe isn't showing much of anything this morning, also holding its breath even after the hotly anticipated number hit the tape. Read European stocks .
Unlike the Dow yesterday, the Nikkei failed to avoid a three-day losing streak today, closing down just fractionally after a trading day marked by wide swings. Bear market time ? Shanghai stocks were hit the hardest of Asia's major indexes, off more than 1% to extend their losing streak to seven days. Read: Asian stocks drop on caution over U.S. jobs data .
The Nikkei chart will be a great Christmas card by year end pic.twitter.com/x2gpBE8qPW
— Ivan The Terrible (@SqueezedEquity) June 7, 2013
The economy:It's "Jobs Report Friday!" and everything else pretty much takes a back seat. Economists polled by MarketWatch were looking for the Labor Department to tell us that 164,000 jobs were created in May , down a bit from 165,000 in April. Instead, they got 175,000. Read more from Capitol Report .
The buzz: It doesn't look like this NSA "Big Brother" surveillance maelstrom is going away anytime soon. Google , Facebook and Apple are now being mentioned and the paranoia is running high. Read more about "the U.S. government's Internet espionage super operation."
In digital era, privacy must be a priority. Is it just me, or is secret blanket surveillance obscenely outrageous? http://t.co/KONSBtTWjc
— Al Gore (@algore) June 6, 2013
While the New York Times quietly pushed through its "on this issue" edit , Michael Arrington didn't mince words . "It's Orwellian and it kills liberty and freedom on a scale never seen before. It's not a way to stop terrorism. It IS terrorism," he wrote. Suddenly, Google Glass doesn't sound so bad.
Now we know what they were toasting. #PRiSM pic.twitter.com/9GS7beG0MY
— Bespoke (@bespokeinvest) June 7, 2013
Samsung shares are in the tank this morning after J.P. Morgan Chase cut its profit estimates for the world's biggest smartphone maker. BlackBerry is also trending on StockTwits.
Investors are still trying to figure out what to do with SodaStream after yesterday's buyout/no buyout, rumor-mongering roller coaster . The stock, which only managed to tack on 3% yesterday, is inching north premarket.
Quiksilver and Vail Resorts are worth keeping an eye on when the bell rings. Quicksilver is getting creamed on its quarterly report while Vail could be looking at a weaker open, as well. Read: Stocks to watch .
The chart of the day: Remember all those headlines when the Nikkei caught the Dow? Well, the pairing, which was much more common a few years ago, didn't last long. The two have diverged in a big way. Look at this chart from Ed Yardeni . Since meeting on May 21, the Dow has lost 2.8% while the Nikkei has dropped 16.7%.
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Haver Analytics
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Random reads: To those hiding under the table with my father-in-law, paralyzed by the fear of having the government privy to all your communications, here are a few not-so-easy ways to stay under the radar.
Turning tragedy into $5,000. Then facing 25 years in prison .
Black Sabbath, decades removed from groupies, violence and having cocaine flown in by private jet, are releasing their first studio album with Ozzy in 35 years.
Almost two years into my London stint, and I still haven't picked up on cricket. BuzzFeed thinks I should .
Need to Know starts early and is updated as needed until the opening bell, but sign up here to get it delivered once to your e-mail box. Be sure to check the Need to Know item. The e-mailed version will be sent out at approximately 8:45 a.m. Eastern. Follow @slangwise on Twitter.
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