Futures vs FV: SP -2.98; DJ -20.03; NADSAQ -4.85
Futures are just modestly lower, trading off the morning lows, off the morning highs. Very quiet as the market volatility from last week and DB's worries has ebbed considerably. Will buyers use the modest dip? Jobs report tomorrow and they may wait for that . . . but as noted last night, they waited the last reports and did nothing afterward. Heck, earnings start up right after jobs so likely nothing happens post-jobs and earnings will be the next real driver.
Or some other massive event. DB is out of the headlines, kind of, but it is worth noting that the reports are Germany continues running through bailout proposals. DB today announced another 1K layoffs. Drop in the bucket.
The problem is the size. Germany's GDP is 3T euro. EU GDP is 14.6T euro. DB's derivatives exposure is 42T euro. As with US social security, the math doesn't add up. There are not enough euro tax payers to bail out DB if there is a full frontal collapse. Of course DB denies that can happen. As did LEH, AIG . . .
ECB: Minutes to be released today and the speculation is about whether taper discussions took place.
Challenger job announcements: +38% mo/mo, -24.7% year/year
Jobless: 249K vs 258K vs 254K prior. This is a worthless statistic now, has been for many, many months, indeed years. The interesting point to note: there are virtually no revisions now. Remember when the revisions each week were so closely watched because they were so wild? Now even with large expectations misses, there are no revisions. No need to do any work on it as no one is watching anymore. Mission accomplished!
UN-M&A: LRCX and KLAC call it quits on their proposed merger. While it would save the companies money and may save the companies, the regulatory environment is such that even though the government has created a tax and regulatory environment that requires companies to merge to survive, it is not letting them merge.
TWTR: unwanted as WMT, GOOG, AAPL, DIS not expected to make bids. The ONLY reason TWTR stock rose was speculation of a takeover. When that dies off, the price dies back down because TWTR is a terrible company run by a part-time CEO.
JD: WMT ups its stake.
Oil: Over $50/bbl for the first time since June.
OTHER MARKETS
Bonds: 1.727% versus 1.72% 10 year. Holding the losses
EUR/USD: 1.1181 VS 1.1207. Dollar now starting to gain versus the euro as well.
USD/JPY: 103.86 vs 103.53
Oil: 50.20, +0.37
Oil: 1261.30, -7.3. Gold renews its downside from Tuesday when it bombed lower
Stocks trying to get back to the flat line ahead of the bell, showing an ever so modest upside trend. Will see if anything comes of it, but again, with jobs Friday and earnings next week, like not many are willing to get all that amorous with stocks. We remain, however, open to good stocks making good moves, up or down. Still no merging of the indices into one trend, but still some good moves we can put SOME money into as we await that move.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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