Wednesday, August 05, 2009

Jobs Report Preview Higher Than Expected, Stocks Pull Back

My morning post is a bit late today as I was covering the FWLT conference call for FWLT reported an outstanding quarter, and the stock is +13% higher on the results. After my summary of the call is posted on, I will post a copy here.

Stocks are taking a rare breather, at least in recent weeks, after a weaker than expected ADP Employment Report spurred profit taking. The ADP report showed the economy lost -371,000 jobs, above the -350k consensus. The government payrolls report comes out Friday, and is a bigger market moving release. The consensus for that report is -328,000.

We also got a weaker than expected ISM Services report, which came in at 46.4 vs. 48.0 consensus. This marks the 10th straight reading below 50, which is the level that marks the difference between expansion and contraction.

The dollar was higher earlier, but has since fallen into negative territory. Commodities are generally weaker; the 10-year yield is lower to 3.65%; and the VIX is up a bit to 25.28.

Trading comment: Yesterday I took profits on WMS and added ASCA. The latter stock is lower today after reporting lackluster earnings. Such is trading.

The Nazz is down -1.5% today, for the first time in awhile. The NDX is deep into overbought territory, and badly in need of a pullback, imo. I own the Nazz 100 inverse etf (QID) as a hedge. I was admittedly early in adding to this position, but I think it works here as the NDX should pull back.



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