Friday, March 9, 2012
It is hard to use 'good news' and 'Greece' in the same sentence
given the unfortunate nation's recent run of bad luck, but we do
have some good news out of Greece today. With enough bond holders
agreeing to take losses on their Greek government bonds, the
country appears on track to complete the contentious bond swap.
This should pave the way for the country to receive the fresh
bailout from the IMF/EU/ECB troika.
But as welcome as the Greece news is, the market's attention
today is focused on the home front, with this morning's
better-than-expected February non-farm payroll report putting the
spotlight on the labor market.
The Bureau of Labor Statistics reported jobs numbers for
February of 227K, compared to expectations of 210K. The tallies for
January and December were revised upwards, belying expectations
that the last two months' strength was due to one-off seasonal
factors. The unemployment rate remained unchanged at 8.3%. Average
hourly earnings ticked up, while the average workweek remained
unchanged, rounding out an overall very positive labor market
report.
The strong February jobs numbers confirm beyond any doubt that
the recent improving trend in the U.S. labor market is not due to
some temporary seasonal factors, but rather a sign of things to
come. This will not only strengthen the economy's growth momentum
through its knock-on effects on consumer confidence and household
buying power, but could also play a positive role in helping prop
up the housing 'green shoots.'
With these numbers now in the open, investors will be trying to
handicap the Fed's courses of action and the odds of further
quantitative easing. My view is that positive labor market momentum
in a backdrop of high gasoline prices and an overall uncertain
inflationary backdrop reduce the odds of further quantitative
easing. There is simply no need for the Fed to come to the
economy's rescue when it can do just fine on its own.
In corporate news,
Texas Instruments
(
TXN
) lowered outlook for the current quarter in its mid-quarter update
after the close on Thursday.
Aeropostale
(
ARO
), the teen retailer, came out with a positive results, but guided
lower.
Sheraz Mian
Director of Research
AEROPOSTALE INC (
ARO
): Free Stock Analysis Report
TEXAS INSTRS (
TXN
): Free Stock Analysis Report
To read this article on Zacks.com click here.