Morning coffee brief

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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 8:30. Image courtesy Willie Cloete: http://www.sxc.hu/profile/Pulpdtp 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' forecast.

HR and temp company Randstad Holdings ( RANJF , quote ) has been upgraded to buy from hold by rating agency Standard and Poor's.

Later this afternoon, Warren Buffett's Berkshire Hathaway ( BRK , quote ) 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:

Crude oil

101.22

-1.32

-1.29%

Gas

3.034

     -0.016

-0.52%

Nat Gas

2.343

+0.003

+0.13%

Gold

1,633.20

-1.60

-0.1%

Silver

29.965

-0.045

-0.15%

Turning to the economic calendar we find the NFP report being the key element along with the Canadian Ivey PMI report at 10 a.m. EDT.


Live Economic Calendar Powered by Forexpros - The Leading Financial Portal

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:

TEVA - 5/9/12 before the bell.

MPEL - 5/9/12 before the bell.

PBR - 5/11/12 after the close.

VIP - 5/15/12 before the bell.

Bottom Line : 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 response.

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 patience traders.

Those looking to trade the NFP report prior to the release can check out the game plan here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Stocks

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