Market Talk

Big sell-off today, and it’s pretty much across markets (of course, the traditional safe havens, Treasurys and the dollar, are having a good day) and we dig into it in today’s Markets Hub.

Keep an eye on both 12000 on the DJIA and 1300 on the S&P 500 today. Those two numbers sit roughly on the uptrend line from August, and if they’re broken, a bigger sell-off could be in the cards. Both levels have been pierced, but are currently holding.

US stocks rallying sharply as the market just isn’t interested in worry today, and there are more signs the labor market is improving.

DJIA surges 191 (1.6%) to 12258, its best one-day gain (points and percentage) since Dec. 1; S&P 500 rises 23 (1.7%) to 1331, Nasdaq Comp jumps 51 (1.8%) to 2799. NYSE composite volume is a bit above average. Concurrently, Treasurys drop, with the 10-year yield jumping back up over 3.50%.

Weekly jobless claims fall again, to 368,000, raising hopes that the labor market is finally, actually improving. This is contributing to a lot of enthusiasm about tomorrow’s jobs report. But remember a lot of it is based on the fact that the January report was so weak — ostensibly because of the massive snowstorms — that a big snapback is expected for February. Which means you’ll have to take the two months together and average them out if you want to have an idea of the underlying strength of the jobs market.

There’s also a general easing of tensions about the whole Middle East thing, although you wouldn’t really know it from crude futures. There’s some optimism (and let’s hope it’s not misplaced) that the revolt in Libya may come to a relatively quick conclusion, and seeing as there hasn’t been a major blow-up, literally or figuratively, in any other nation, people are taking that as a positive.

However, while Nymex crude was down for the today’s session, it’s still pushing $102/barrel, and Brent is still just under $115. These are still very high, elevated levels, and those elevations are going to be elevating your gas prices over the next few weeks, and we’re not even into the summer driving season yet, when prices always go up.

Premarket futures signal US stocks are ready to launch higher when regular trading begins, with strong gains in European markets helping to lift bullish sentiment.

Escalating oil prices have kept bulls corralled lately, and after showing some vulnerability last week, they need to show their stamina in snapback today to regain momentum.

They’re trying hard this morning, and the crude pits so far are cooperating. S&P futures up 11.40; Dow futures up 83. Ten-yr note lower, yield back over 3.54%. Crude futures down more than 1%, with Nymex now trading around $100.74/barrel.

Weekly jobless claims fall for another week, with claims now well under the 400,000 level. Combined with yesterday’s ADP report, you are now allowed to have hope, scant hope but hope nonetheless, that the jobs market is actually getting better.

“There is nothing magical about the 400,000 level, but breaking below 400,000 is a good sign,” Calculated Risk says. “The sharp drop in weekly claims suggests improvement in the labor market.”

ISM Feb services index due at 10:00 a.m. Feb chain-store sales flow out all morning.

On the subject of retail sales, here’s an early read from Newswires’ Karen Talley:

Retailers are off to a decent start in reporting February same-store sales, with Limited (LTD) beating expectations with a sharp 12% jump. Among teen retailers, Hot Topic (HOTT) posts a smaller-than-anticipated drop and Zumiez (ZUMZ) continues the very-strong performance its has seeing in recent months. Conversely, Stage Stores (SSI) says it fell victim to being a department-store chain focused in an area where weather was especially tough. It reported a 7.2% SSS drop when a 2.5% rise was expected by analysts surveyed by Thomson Reuters.

Talk about timing. John, George and I were literally standing at the set, talking about Cisco’s earnings, when the first headlines started crossing about Mubarak stepping down. If we’d have taped five minutes earlier, we would’ve missed it, and I’d be cursing up a blue streak.

The market has a lot internally to deal with, but you wonder if the bulls will just grab onto the Mubarak news and force yet another rally.

(Incidentally, holy cow do I look small next to those two guys. Somebody get me an apple box.)

Judging from the mountain of snow on my front lawn, I don’t have a very hard time buying that today’s jobless claims number was affected by the snow. We’ve been averaging two snow “events” a week since Christmas here on the east coast, and got another foot dumped on us overnight. Frankly, I’m running out of places to put it all.

I started to understand this morning how those people in Pompeii got buried alive under the ash of Mt. Vesuvius. The stuff just keeps coming and coming, and before you know it, you’re buried alive. I can really see that now. At some point, they just said, the hell with it, if I get buried alive, I get buried alive. I’m done shoveling ash. I’m going back to my breakfast.

I’m not even sure the Italians had shovels back then, either. They definitely didn’t have snowblowers.

On the other hand, let’s not get too crazy with the snow excuse. We’ve still got a very lame job market on our hands.

Continue reading…

Lot to discuss today in a very short amount of time: China, earnings, jobless claims, home sales and S&P 1300. All that in three minutes, it must be the Markets Hub.

Getting a bit of a late start here this morning. But, hey, if you’re shocked by this morning’s “unexpected” jump in jobless claims, raise your hands. Anybody? Anybody?

No? You shouldn’t be. Forget for a second whether or not the dip below 400,000 two weeks ago in the initial claims was some kind of methodological aberration (wow, that sounds so high-brow, doesn’t it?) It’s depressing enough that the claims have gotten back to the 450,000 level that’s been like a magnet for them for a year now. If you’ve been following this thing week in and week out, it’s a real bummer, man.

But the real issue isn’t the statistical noise. The real issue is that companies are still seeing weak demand for their wages, are still constrained by costs, and are still — almost three years after the recession began — trimming, pruning and otherwise right-sizing their staff to meet the weak state of things.

The cycle of expanding businesses, rising demand, rising wages, increased hiring, increased demand, more expansion, more hiring, higher wages, etc., etc., just isn’t working right now. Businesses aren’t expanding, at least not here, not enough. Jobs aren’t being created, at least not enough of them. Wages aren’t rising, not by enough. We’re just spinning wheels.

Steelcase, which makes office furniture (AHEM!) said this week it’s closing three plants and laying off 750 workers. Office furniture. Get it? How’s that expansion going, boys?

Evergreen Solar is closing a pant in Devon, Mass., that will “affect” 800 employees.

Supervalu, which runs supermarkets, is closing a bunch of stores and laying off 350 people. In its earnings release this week, the company noted that all of its major vendors are raising prices, anywhere from 3-14%. Have you noticed that at the supermarket? Well, maybe your supermarket got shut down.

Okay, solar’s still a niche thing, at least here in the states. But office furniture and supermarkets? That ringing some kind of bell for you?

Is anybody in America hiring? Of course they are. There are some jobs being filled. But they’re here and there, nowhere near reaching the kind of critical mass necessary to make any kind of real dent in the unemployment rate. Also, the kinds of jobs being filled matter, along with the wages being paid. People taking pay cuts to work jobs that are worse than the ones they used to have isn’t exactly the kind of thing to bring about a new morning in America.

The jobs market still stinks. You may not return to your regularly scheduled program.

It’s hard to imagine a flatter session for US stocks, which barely budged today, despite several encouraging economic reports this morning.

DJIA eases 16 to 11570, S&P 500 loses 2 to 1258, Nasdaq Comp slips 4 to 2663. NYSE volume at roughly 1.87B shares composite is one of if not the lowest of the year.

Jobless claims drop sharply to under 400,000, lowest since July ’08. Chicago PMI surprises to the upside, and pending home sales rise (still down from a year ago.) While the direction in jobless claims is clearly improving, the surprisingly large drop today should make you cautious. We wrote this up for the wire earlier:

Barclays says the drop in jobless claims is “clearly a positive signal regarding the labor market and reinforces the downward trend that has been in place since mid-summer.” But firm notes it expected a drop, as the report’s seasonal factors anticipated a sharper rise in the non-seasonally adjusted numbers than actually appeared; unadjusted claims rose by 25,000 to 522,000, less than usual for this time of year, firm says. “While we expect this downward trend to continue, we expect next week’s report to show a bounce back up to 410,000 for initial claims for the week ending Jan. 1, as the usual seasonal rise in unadjusted claims begins.”

Also, we’re all off tomorrow, so unless we get some burst of nervous energy, this is likely our last post for 2010. Year went by like lightning. Let’s hope 2011 is better, but hope, as has often been noted, is not a very good basis for action.

Thanks for reading the blog. We’ll see you next week.

US stock futures hint at a flat to slightly higher open when regular trading begins in two hours, with mixed markets in Europe offering some influence to the premarket tone. Stocks mostly lower in Asia overnight, euro holding its own, recently at $1.3243.

FedEx reports fiscal 2Q results before the open, and could have some bearing on the markets’ early direction; Oracle, Research In Motion report results after the close. The package-delivery outfit, an obvious bellwether for the global economy, didn’t exactly send in a ripping report. More on that later; shares a down a bit in premarket.

Weekly jobless claims, November housing starts due at 8:30 a.m. ET; Philly Fed’s December business outlook set for 10:00 a.m. EU officials meeting in Brussels to try to hash out a long-term program for dealing with sovereign debt issues.

S&P futures up 2.10; 10-yr note higher, yield at 3.48%.

Mixed is the word of the day, apparently. In the markets, in the jobless claims, even in the M&A pocket, there’s both good and bad within the same stories.