Friday, January 05, 2007

Jobs Report Stronger Than Expected

The market is opening under some heavy selling pressure. The catalyst was the stronger than expected jobs report.

Nonfarm payrolls rose +167,000 vs. expectations for +100,000. While stronger economic news is usually bullish, the market is really hoping for the Fed to cut rates in the near future. And every piece of strong economic news makes it less likely the Fed will move to cut rates.

The bond market didn't react well either, as the yield on the 10-year T-note is rising 6 basis points to 4.67%.

Oil has now fallen all the way down to $55.50, down roughly -10% ytd. This has led to a huge 2-day shellacking in the energy stocks, though they now look a little oversold.

Utilities are down the most so far, while retail and biotech are the only positive sectors. But its still very early. I wouldn't be surprised to see much of this weakness fade by the close.

In other news and notes:
  • Asian stocks fall overnight
  • APKT profiled in IBD's New America
  • N. Korea prepping another nuclear test
  • PCCC downgraded to Peer Perf. at Ray James
  • Jeffries names AMAG a top biotech pick
  • BBY reports strong same-store sales (+7%)
  • FBR puts target for BEAV at $33
  • Soros fund bought JCP, KSS
  • MOT gets crushed after lowering guidance
  • Oppenheimer bullish on YHOO
  • HANS is Top Pick of 2007 for Longbow
  • Brean Murry puts BRLC target at $18
  • UBS starts SIRF at Buy ($33 target)



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