Market Talk

- All the recent chatter concerning the Fed’s exit strategy is puzzling, Tim Iacono says. Maybe it’s “simply a way for policymakers to generate confidence that might not otherwise be there.”

- Keep an eye on cumulative breadth, number of stocks moving up and down on a given day, for clues about future market performance, Bespoke Investment Group says.

- Despite the aughts being a lost decade for the stock market, 401(k) savers did ok, at least according to Fidelity Investments. “But unless market performance picks up in this decade even dedicated 401(k) savers could come up short in their retirement savings,” LA Times’ Walter Hamilton says.

- Google’s (GOOG) $2 million donation to Wikipedia “cements a kind of symbiotic relationship” between the two companies, Mathew Ingram writes at GigaOm. “For better or worse, it sounds like Wikipedia and Google will be joined at the hip for some time to come — not just because of the money, but because the relationship benefits both sides equally.”

- Obama administration’s tolerance of AIG is just astounding, Yves Smith says.

- Backlash against Google Buzz has reached a new level. A class action law suit has been filed in San Jose (CA) federal court alleging Google (GOOG) acted illegally when its new social networking tool shared personal data without consent, according to SF Chronicle blog.

- Greece should approach the IMF, former IMF chief economist Simon Johnson says. “Our baseline view is still that the IMF’s role will be only ‘technical,’ but behind the scenes the prospect of greater IMF engagement (and even a standby loan) is a powerful card that Greece should threaten to play.”

- Wall Street’s bailout hustle – Taibbi’s latest missive.

- Chris Dodd plans to introduce a new bill next week to overhaul financial regulation.

- The pilot that crashed a small plane in Austin posted an anti-government manifesto and may have targeted IRS offices after a tax dispute.

US stocks rise for a third straight session, as investors take solace from a spate of economic reports this morning — and ignore the most important one.

DJIA jumps 84 (0.8%) to 10393, S&P 500 gains 7 (0.7%) to 1107, Nasdaq Comp rises 15 (0.7%) to 2242. Low volume, late buying marks this session as it has the others this week.

Philly Fed, Conference Board show improvement, and Wal-Mart’s earning rose. But jobless claims rose, too. And emergency claims rose sharply, suggesting people who’ve been fired still are having a very hard time finding new work.

An Association of American Railroads report today has some interesting nuggets that add more texture to the state of the current economic recovery.

Still empty and idle.

In “Great Expectations: Railroads and U.S. Economic Recovery,” the railroad trade group notes US rail carload traffic was down 16.1% last year vs 2008, and off 18.2% vs 2007. AAR said last year’s carload total was the lowest for U.S. railroads since before 1988, when it started keeping track.

And “freight rail traffic today remains well below 2008 levels,” AAR adds.

Not a good sign. As the trade group says, “demand for rail services occurs when there is demand for the products that railroads haul,” which is pretty much everything. “In other words, if America is not building or buying, railroads are not hauling,” AAR says.

Continue reading…

They say things are getting better. I don't see it.

The stars are aligning for an improving economy — as long as you ignore the biggest star of them all.

Most of this week’s economic data continue to point to a recovery: the Philly Fed index increased and has remained positive for six straight months; industrial production rose again; NY Fed’s manufacturing survey showed improvement and the Conference Board’s index of leading indicators rose for 10th consecutive month.

“Perhaps the economy is approaching a point at which employers suddenly conclude that the recovery is for real and start hiring, generating new momentum for the expansion,” The Economist’s Free Exchange blog writes. “But it is strange to see recovery this persistent and this strong, with so little new job creation.”

That’s the one, big out-of-alignment star. And perhaps the gains in the other numbers aren’t so strange when considering the severely depressed levels from which most of them are recovering, which still leaves them well below levels considered “normal.”

The jobs market still isn’t pretty, and today’s weekly jobless claims data proves that point. Claims jumped 31,000 to 473,000 last week, much higher than economists were expecting. Not a good sign, especially since that number needs to get closer to 400,000 for the economy to start adding jobs again.

Continue reading…

We should rename this “Tomorrow’s Caveats Today.” Seems like everything’s got a “but” built into it these days. Today we’re talking about the Philly Fed, jobless claims and Wal-Mart’s earnings, and while the market had some mixed reactions, there are elements beneath the headlines worth keeping in mind.

'Metaphor,' derived from the Greek metapherein, is a figure of speech in which one object is used to suggest a likeness to another object.

It’s still amazing to me that Greece’s finance minister, George Papaconstantinou, referred to his country’s economy as the Titanic. Was it a Freudian slip? Who would consciously invoke such a horrible metaphor? I mean, for God’s sake, even in the Hollywood version the ship sinks and Leonardo DiCaprio freezes to death.

“We are trying to change the course of the Titanic, it cannot be done in a day,” he said the other day. “We are beginning to show that step by step, we are following words with action. If additional fiscal measures are needed, we will take them.”

Did anybody else do a spit take when they heard that? Ben Bernanke, Alan Greenspan and the rest of this nation’s “finance ministers” are so careful about their words that they often end up delivering a lukewarm stew of boiled platitudes, leaving everybody wondering just what in the hell they’re really thinking. You think Ben Bernanke would ever refer to the U.S. economy as the Titanic?

But, hey, maybe old Georgie was onto something. Newswires publishes economic and political calenders for most nations. I looked at Greece’s this morning, and the first item on it was this:

Wednesday, February 24, 2010: National strike in Greece over public debt dispute.

When the top item on your economic calendar is a national strike, well, maybe you are riding on the Titanic.

Continue reading…

We don’t want to ruin anybody’s good time, but this morning’s weekly report on jobless claims was a kidney punch to the V-shapers. People are still having a hard time finding new jobs, and their numbers are increasing, not decreasing. That’s going to continue to hamper the rally’s ability to get past the morphine-drip phase.

Yesterday’s report on industrial production sparked some enthusiasm, and who not? Manufacturing has rebounded sharper than anything else in the economy, and is often seen as a leading sector in any recovery. The problem with that these days is that manufacturing in the United States has shrunk to the point where it’s roughly 15% of the economy, so improvements there may not spill over to the broader economy, at least not as fast as in the past.

The Labor Department reported weekly jobless claims this morning, and they were bad on just about every front. First off, initial claims spiked up 31,000 to 473,000. Yes, it’s still well off the nearly 700,000 level it hit at the depths of 2009. But that number needs to be moving closer to 400,000 to translate into actual jobs gains, so the move closer to 500,000 should be disconcerting.

But, even more importantly, claims for emergency unemployment benefits, a number we have been harping on for some time, hit another high, jumping 304,700 to 5.79M for the week ended Jan. 30 (this series is reported with a two-week lag to initial claims.) These are benefits that people claim after their initial and continuing benefits run out (and, incidentally, those initial benefits are paid by employers; these extended benefits are paid by the states.)

Tallying up initial, continuing and emergency, Miller Tabak’s Dan Greenhaus pegs the total at 10.56M, and that’s a fresh record high, too.

“While there have been a series of isolated issues – backlogs, snowstorms – that are clearly affecting initial claims, it is quite clear that whatever improvement we have seen in initial claims is not being seen on the continuing claims front,” he says. “This stands in stark contrast to action seen in 1982, the last V-shaped recovery in labor.”

After a blistering rally Tuesday, followed by not much of a rally but at least gains yesterday, the bulls are looking like they need a little shot of Red Bull to keep the party going.

No clear path indicated by US stock futures premarket, though weekly jobless claims and January PPI at 8:30 a.m. ET may provide some influence.

Philly Fed’s February manufacturing index and Conference Board’s Jan LEI both set for 10:00 a.m. Stocks generally weaker in Asia overnight, Europe looks better.

US dollar index a hair higher after solid gains yesterday; oil and gold both lower. Wal-Mart 4Q results are out, view on 1Q EPS puts Street at high end of WMT’s forecast range, shares off 1.8% premarket.

S&P futures down 1, DJ futures down 1. Ten-year a shade higher, yield at 3.73%.