Friday, March 5, 2004
Issue Contents:
| 08:11 | This Morning Drum roll please. |
| 09:15 | The Number Headlines and reaction. |
| 15:27 | Waiting For... Godot. |
| 15:44 | Economic Data Summary of today's releases. |
| 16:16 | Active Trader Transcript Real time forum log. |
Well, I'm afraid I got home less than an hour ago, and as usual, it's dreadful to be on West Coast time.
In any event, I think the point of today is to take a look at the employment situation: non-farm payrolls, unemployment rate, average hourly earnings and average workweek. The numbers will be out shortly at 8:30AM Eastern, and we'll see if it becomes the catalyst to blast the market out of the big congestion pattern that we've been following on the broad indices.
Of course, it would be nice if there is no big gap on the open...
(WSJ.com) - U.S. payrolls grew by a mere 21,000 jobs in February, far fewer than the 125,000 economists had been expecting. The unemployment rate held steady at 5.6%.
This is why they call them "catalysts". And now, the big gap down on the stock indexes...
Traders have been waiting for and anticipating a breakout for eons on the Dow Industrials and the S&P 500. With each potential catalyst, more people try to get a jump on it, betting on the direction of the ultimate breakout.
Here's an intraday chart of the S&P futures. The green dotted line is yesterday's high while the red dotted line is yesterday's low. We've seen so much of this whipsaw lately. Gap down open to test yesterday's low, and when it doesn't go down, it shoots straight to yesterday's high. All breakout players get whiped. Again.
Non-farm Payrolls +21,000
Unemployment Rate 5.6%
Average Hourly Earnings +0.2%
Average Workweek 33.8
(Econoday.com) - The economic outlook ebbed backwards Friday as the payroll survey disappointed for a fourth month in a row. Non-farm payrolls rose only 21,000 in February, well below expectations for 125,000. Putting salt in the wound were downward revisions in January and December that totaled 23,000. The results push back further the risk that interest rates will turn higher, a big plus once again for the bond market and offering no help to the stock market. The results also point perhaps to new downward pressure on the dollar.
Total hours worked also point to economic weakness, slipping 0.1 percent in the month. The average workweek was unchanged at 33.8 hours. These results are not indicative of a strong economic pace, which is needed to spur new hirings especially against still rising worker productivity. Average hourly earnings rose a modest 0.2 percent in the month compared with January and are up a modest 1.6 percent year-on-year, further pointing to a mild economic pace.
Consumer Credit $14.3 Billion
(Econoday.com) - Consumer installment credit expanded a whopping $14.3 billion in January after an upward revised gain of $8.2 billion in December. The January spurt was significantly larger than expected, particularly since motor vehicle sales plunged during the month. Yet, nonrevolving credit (which is largely comprised of auto loans) expanded $9 billion in January after a $7.4 billion rise in December. It is true that auto loans are sometimes not completed on a timely basis and bleed over into the subsequent month. If a significant portion of motor vehicles were sold at the last week of the month, the loan might not have been fully processed until early January. Revolving credit, which is primarily comprised of credit card debt, jumped $5.4 billion in January after a tiny $0.8 billion gain in December. January non-auto retail sales were pretty healthy and this portion of the report is consistent with the retail sales data.
Real time forum log.
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