The Friday trading session is upon us - finally. The U.S.
markets are on target for a losing week but that could all change
on this morning's April non-farm payroll (NFP) report out at
Ahead of the NFP report traders pulled risk off the table to the
point of sending the major averages to the biggest drop since
April 23 and the NASDAQ since April 13.
Sentiment has shifted to a lower number report.
The whisper number for the NFP is for an increase of 150,000,
well below analysts' forecast, with the unemployment rate
persisting at 8.2%.
The other key element to the report traders will be watching
is the revision of the March payroll numbers, which initially
reported gains of 120,000 - a downside surprise to analysts'
HR and temp company Randstad Holdings (
) has been upgraded to buy from hold by rating agency Standard
Later this afternoon, Warren Buffett's Berkshire Hathaway (
) will release its quarterly earnings report ahead of the annual
meeting. It will be interesting to see how Mr. Buffett is viewing
the global economy.
Europe is trading mixed ahead of the U.S. NFP with the CAC up
by 0.08% to 3226.00, the DAX down by -0.25 to 6777.43, and the
FTSE down -0.49% to 5738.57. However, Spain is up by 1.83% and
Italy is +1.02%.
Asia Pacific on the whole closed on the lows on uncertainty
about the U.S. economy with Australia down to -0.74% to 4396.00,
China up 0.49% to 2452.01, Hong Kong down 0.77% to 2108.00, and
Japan up 0.31% to 9380.25.
Crude oil fell like a rock as European Central Bank President
Mario Draghi said the euro area's economic outlook has become
"more uncertain". The ECB statement coupled with the U.S. buildup
of inventories caused oil to drop the largest percentage decline
since December 14, 2011. WTI crude oil June contracts settled at
$102.54 or down -$2.68/2.5%. Brent June contracts settled at down
$2.12/1.8% to $116.08.
U.S. futures are lower ahead of the NFP with the Dow -2
fair value -10.59, S&P 500 0.00 fair value -1.87
and the NASDAQ 1.75 fair value -7.44.
Pre-market commodity moves:
Turning to the economic calendar we find the NFP report being
the key element along with the Canadian Ivey PMI report at 10
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The earnings calendar remains quiet for the remainder of the
week with no names reporting on the Emerging Money Index until
next week. Next on deck:
- 5/9/12 before the bell.
- 5/9/12 before the bell.
- 5/11/12 after the close.
- 5/15/12 before the bell.
: Traders are fixated on the NFP release today at 8:30 a.m. EDT.
If the NFP surprises to the upside look for risk on sentiment to
take control of the market. However if we get a surprise to the
downside below 125,000 it's possible to get a big over-the-top
If the latter happens I personally will be looking forward to
Monday with my shopping list. Remember the Fed said they are
ready to step in if needed. If needed the market will have the
Fed put a floor under it, and if we get a strong number the
market should do well on a U.S. recovery - a win-win for smart
Those looking to trade the NFP report prior to the release can
check out the
game plan here