The backdrop for today's trading action is a bit mixed, but
that may not be enough to prompt stocks to climb down from record
levels as they wait for the key labor market reading
In terms of data, the weekly Jobless Claims numbers dropped
further in the right direction, trade deficit expanded, and the
first revision to fourth quarter productivity came in a tad
weaker than expected. Beyond the U.S. shores, monetary policy
actions from the European Central Bank (ECB) and Bank of England
came in as expected, with both central banks leaving short-term
interest rates unchanged.
But the big report on the economic front is Friday's non-farm
payroll report for February, for which today's better than
expected Jobless Claims number is not exactly relevant from a
timing perspective. The survey for today's claims was conducted
two weeks after the government jobs survey, so the initial claims
data does not help us in drawing conclusions about Friday's jobs
tally from the Bureau of Labor Statistics (BLS). But Wednesday's
ADP report matched exactly the survey period for tomorrow's BLS
report and the ADP report is pointing towards positive momentum
in the labor market.
Consensus expectations for Friday's BLS report (+170K private
sector and +160K in total jobs) have not moved up following the
better than expected ADP report given concerns about the
potential negative impact of the Northeast snowstorms on the
data. But the odds are high that we will get a positive surprise
tomorrow. The reason for my optimism is the trend in weekly
Jobless Claims in recent weeks and also the employment components
of the ISM surveys. With initial claims less than 350K, it is
reasonable to expect monthly BLS jobs in the 200K vicinity.
That's why barring any snowstorm distortions, I will be looking
for a strong BLS report tomorrow.
In corporate news,
) effort to go private have taken an interesting turn, with Carl
Icahn joining the fray by taking a position in the troubled PC
maker. In earnings reports, we have weaker than expected results
), while data-equipment maker
) coming out ahead of expectations.
figures are to be released today at 3:00 PM EST and are expected
to increase by $16 billion after increasing by $14.6 billion in
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