US stocks nearly catatonic today, with the major indexes little changed even as crude and gold futures post sharp gains, and the dollar loses a little ground.
After slipping 12 points yesterday, DJIA adds 2 to 10574 today, meaning the index has moved 10 points in two days. Sure, it’s cold in New York these days, but that is practically icebound. S&P 500 adds 1 to 1137, Nasdaq Comp slips 8 to 2301. NYSE volume’s light.
Sen. Dodd announces retirement, as well as other prominent Democratic retirements, scrambling all the political calculus. Services sector report shows it on the edge of expansion, and still mainly shedding jobs. ADP puts December job losses at 84,000. Fed minutes show central bank still worried about strength of the recovery.
Jobs will continue to be a focus this week, with tomorrow’s initial jobless claims report and Friday’s monthly jobs report. Tomorrow, keep an eye on the numbers for emergency extended benefits; that’s what people claim after their “regular” unemployment benefits run out and they still haven’t found a job. It’s been rising sharply, which says people are still having trouble finding new jobs.
- Google’s actually a fan of Apple’s Quattro Wireless deal. “Google’s logic here is straightforward: If other big companies are buying mobile ad networks, then Washington can’t possibly be upset with us for buying AdMob,” MediaMemo blogger Peter Kafka says.
- Palm Pre, Pixi to Verizon could finally become a reality. Announcement could come this week at CES.
- Demand for 3-D TVs seems questionable. “I’m not against 3-D televisions, I’m just wary of the actual viewer experience,” Nick Bilton writes at NYT’s Bits blog.
- IPhone and Nexus One “will appeal to different constituencies, to some degree, but Apple is going through the same experience it did in the early days of the PC industry,” Paul Kedrosky notes. “It legitimized a more elegant approach, and now looks set to stake out a somewhat marginalized position, if a highly profitable one.”
- UK’s trying to bully Iceland around, which upsets Reuters blogger Felix Salmon. But Mish says Iceland’s tough stance is the right move. “Congratulations to Iceland for figuring out that it is better to suffer a credit rating downgrade than to torture its citizens for a decade or longer.”
- Nexus One only unveiled 24 hours ago and its already creating winners and losers in the tech space, Barry Graubart says.
- Expect a “boring” year compared to 2009 if you’re looking to invest in financials.
- Fed officials disagree about withdrawing stimulus.
- AT&T’s adding cellphones running Google’s Android software to its lineup this year, including a smart phone from Dell, as well as Palm devices as it faces competition to carry the iPhone.
Posted by Paul Vignaon January 06, 2010 Technology /
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It could have been the only one.
If I ever leave journalism for some reason, I’m going into advertising. Besides the fact that I’ve seen every episode of “Mad Men,” I’m telling you, I just have a mind for for all that ad-related and marketing kind of stuff.
Take Google’s new smartphone, for example. Now, they call it the Nexus One, and there is just something wrong with that name. It doesn’t roll off the tongue. It’s a bit awkward, and far too geeky. Compare it to iPhone. Two short syllables, a bit geeky, but extremely easy to remember. And because Apple names everything the “i” something, it’s become an identifying feature of their products.
It took me a day, but I realized what Google should have named their phone. I was reading an article in the Journal about it, staring at that name, Nexus One, and I realized what name they should have gone with.
One.
That’s right, Google should have called their phone “One.”
Concern about a weak labor market is a main reason why we’re dubious of predictions that the US economy will embark on a sustainable path of growth this year, and it seems FOMC members have some similar worries.
Labor markets remained “an important concern to meeting participants,” December FOMC minutes say, noting the unemployment rate wasn’t the only indicator pointing to “substantial slack” in the job market.
“The employment-to-population ratio had fallen to a 25-year low, and aggregate hours of production workers had dropped more than during the 1981-82 recession,” the minutes note.
And while November jobs report was a lot better than expected, “several participants observed that more than one good report would be needed to provide convincing evidence of recovery in the labor market.”
Also, while the pace of layoffs has diminished, “few firms were hiring.” Indeed, “many business contacts again reported that they would be cautious in their hiring,” the minutes add.
So, initially, I wanted to introduce the Dodd retirement segment by saying “Sen. Dodd apparently has gotten enough out of Countrywide…I mean, Congress…” But Madeleine and our director, Marshall (yes, we actually have somebody who directs us) didn’t think it fit in with the usual tone of Tomorrow’s News Today, so we axed it. They were right, of course, it was out of character. And a cheap shot, to boot. But still, I thought it was pretty funny.
The past few days, I’ve had this feeling, this feeling that I’ve been here before. Stocks rallied on Monday, and everybody and their mother was trotting out the old saw about the predictive power of the year’s first trading session (even though it actually has little to no predictive power, as Marketwatch’s Mark Hulbert explained.)
Wells Fargo’s Jim Paulsen, about as bullish a guy as there is, was on CNBC this morning, saying the market’s recovery is only in its early stages.
Listening to Bloomberg radio on the way to the bus this morning, I heard Benchmark’s Clayton Moran say unemployment had peaked, corporations would be plowing profits back into operations, and GDP was going to be stronger than anybody expects.
Amid all this optimism, you know what it feels like? It feels like 2007. All that confidence was misplaced then, and I worry that it is misplaced now as well.
That whole year felt the same way to me, really. The market kept rising, even as it was obvious that the housing market was in a massive bubble (and anybody who says otherwise is lying or too dumb to know the difference) that was on the verge of popping. Stocks rose — to record highs — right into October, as the equities market with all its great predictive powers completely and blissfully missed the biggest economic bust of our lifetimes.
There was a point in late 2008, maybe early 2009, I forget the exact day, when I called a source, a strategist on the Street who shall remain nameless. The depression in his voice came across so clearly, I asked him what was wrong. “This, everything,” he muttered, “the market.” That was about as forlorn as I can recall anybody being, but I’m still not sure that the market ever really bottomed in sentiment. Said source quickly rebounded, and is about as ebullient as ever. Seems like everybody’s that way.
As far as data points go, the ISM’s services sector report is the bridesmaid to the manufacturing report. The latter was one of the main drivers of Monday’s rally, whereas today’s services report will likely command a few minutes attention before people move on to Chris Dodd, conspiracy theories about the Fed gaming the market, and Woody Johnson’s poor daughter.
The common wisdom is the manufacturing sector drives the economy, and that may be true, but the services sector comprises the vast bulk of the overall economy, as I pointed out in today’s Ahead of the Tape column in the Journal, and the services report deserves attention:
The nonmanufacturing sector comprises 88% of the economy, and it follows that most of the nation’s jobs are in services ranging from construction to finance to pet care. While the worst of layoffs appear to be over, the services report is likely to show that hiring remains elusive.
Analysts expect the services-sector index to come in at a tepid 50.5 when the ISM reports the figure Wednesday morning. Readings above 50 generally indicate expansion. While 50.5 would mark the third month out of the past four above 50, the index’s slide in November to 48.7 shows that the services sector is still susceptible to a pullback. The ISM’s manufacturing index bested 50 for five months running.
A critical component of the services-sector index is even weaker: jobs. The employment sub-index, factored into the overall number, has contracted for 22 of the past 23 months, according to ISM. November’s 41.6 reading of service-sector employment remains in contraction territory.
No real conviction in yesterday’s session for US stocks, and the sense from equity futures is we’ll see some more indecisiveness in today’s early going.
A couple bits of data this morning might offer some influence, but we’d argue that improving economic readings are pretty well priced into stocks at this point, and disappointments are largely being shrugged off by investors as one-offs amid an improving trend, merely minor speed bumps in the road back to prosperity.
ADP’s December employment estimate came out at 8:15 a.m. Firm put December losses at 84,000, slightly better than expectations for 90,000. ISM December services index due at 10:00 a.m. FOMC minutes out at 2:00 p.m ET.
S&P futures down 3.40, DJ futures down 19. Ten-year lower, yield at 3.78%. US dollar index a little higher.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
President Reagan’s former budget director David Stockman says Edward Snowden performed a heroic act, the Patriot Act should be repealed, and this whole spying-on-U.S.-citizens thing is a symptom of an out-of-control military-industrial complex. Click here to watch him go on YahooFinance. The author of “The Great Deformation: The Corruption of Capitalism in A […]
