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Need to Know
JULY 05, 2013
6 gut checks before the stock market's
opening bell
By Shawn Langlois
Good
morning.
Thanks to obliging central bankers in Europe, investors are eyeing stocks
like Joey Chestnut eyes hot dogs . So wet nap
that crusty BBQ sauce from your mouth, toss back a few Advil and double up
on the caffeine, you're gonna need all your faculties today.
The fun should last at least until we get hobbled by some "good"
news on the jobs front. After that, we're at the whims of the
"egregiously erratic" behavior that tends to
accompany these reports. Indeed, no amount of Draghi hugs and Carney kisses
can make up for the chilling effect a healing economy can have on U.S.
stocks in this environment.
There is, of course, that narrow, just right, "goldilocks" range,
which would be enough to please both investors neck deep in equities and
fuddy-duddies who'd rather endure some short-term pain for the long-term
economic health of our country.
But, after yesterday's fireworks, where's the fun in that?
Key market gauges: European stocks are petering out
after yesterday's festivities, with most major indexes in hover mode. In
the U.S., however, the market hasn't had a chance to revel in the
central-bank version of Drake at a strip club , but that will
change when the opening bell sounds. Futures on the Dow and the
S&P are setting up for "pornographic" gains .
Asia already nailed down a solid performance for the week, capping it
off with a 2.1% gain on the Nikkei and a 1.9% gain on the Hang Seng . Read: Asia stocks stride higher on Europe cues
.
So much for "safe havens" today. Gold is down 1.5% .
The
economy: The jobs report will hit at
8:30 a.m. Eastern and more than the actual numbers, the interpretation is
what will surely shape today's market. Expectations are for 155,000 net
jobs last month, which would be lower than the 175,000 from the prior
month. A number below 150,000 might signal more easy money, and we all know
what that did for global markets when the ECB said yesterday that it's sticking to that route . Above
200,000, while good for the economy, is bad for those sucking from the teat
of QE. Stocks would probably get hit. Read the full preview .
The buzz: Samsung warned of a disappointing second-quarter profit this
morning, sending shares down as much as 4% in Korea. The world's biggest
smartphone maker has been getting hammered by downgrades in recent weeks.
Samsung's not the only one feeling pain in the handheld market, though;
it's not like BlackBerry and Apple are crushing it lately.
Banks should start popping up on the radar in the coming days as analysts
generally use this run-up to adjust their forecasts ahead of quarterly
reports. J.P. Morgan kicks off the sector's earnings season next
Friday, followed a few days later by Goldman Sachs . Read: Stocks to watch .
On what will likely be a light day in terms of company-specific news, Tesla
, Alcoa and Apple top the StockTwits trending list .
Paging Winklevii. Bitcoin's implosion continues.
Bitcoin is having quite bad days lately. Not really worth mining it now. pic.twitter.com/6R16fCDa8l
— Ralesk (@ralesk82) July 5, 2013
The chart of the day: Robert Brusca of FAO Economics
stuck it to the Fed yesterday, saying there are many ways in which he'd
like the world to emulate the U.S., but economic policy is not one of
them. "None of these central banks can see into the future. How
can they give us guidance?" he asked in emailed comments on Thursday .
"The expression 'the blind (mis) leading the blind' comes to
mind." This telling chart shows how poorly the Fed's crystal ball has
performed when it comes to GDP forecasting over the past few years (h/t @JamesGRickards
).
The
call of the day: Thanks, Carney.
Apparently, U.K. stocks are a lot more enticing after yesterday's 3%
surge. That's the takeaway from Goldman's latest recommendation to go long
the FTSE 100 December 13 Future for a target of 7,100, which represents a
12% pop from here. Analyst Noah Weisberger cited an improving U.K. economy,
further easing and stabilizing growth for the broader Euro area.
As one might expect, Zero Hedge put this
conspiratorial spin on it: "Of course, the hypocrisy of
Goldman upgrading the U.K. market following its tentacle being appointed to
run U.K. monetary policy, and the Bank Of England, with the sole purpose of
boosting the U.K. 'wealth effect' (and Goldman bonuses), does not escape
us."
Random reads: Sekentei, amae, hikikomori and
why this guy withdrew to his room at age
22 and, 28 years later, is still there.
In-your-face gluttony, Mumbai-style .
"We're going to be shifting the mix of our tools as we try to land the
ship in a smooth way onto the aircraft carrier." That gem from
Bernanke and more Fed metaphors .
Transforming downtown Las Vegas into something more like the Mission in San Francisco. My
advice: aim higher.
Not sure Edward Snowden quite qualifies as the bad-boy type that chicks
can't resist, but his whole whistle-blower thing seems to be working .
Snowden, will you marry me?!
— Anna (@ChapmanAnna) July 3, 2013
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