morning review - 081210

8/9/2019 Morning Review - 081210

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Nicholas Colas (Chief Market Strategist): 212 448 6095 or [email protected] Clark: 212 448 6085 or [email protected]

Beth Reed: 212 448 6096 or [email protected]

We have 2 items to report in terms of positive (or less negative) news : Total net jobs in June equaled a positive 120,000 excluding the 217,000 government workers (mostly temporary census hires) who were let go. The 12-month rolling average of net employment (total hires total separations) declined to -197,000 in June from -554,000 the prior month and its cyclical

trough of -6.8 million in July 2009. In fact, 197,000 jobs lost is the best net employment number since 139,000 positions were eliminated in May 2008. The lastmonthly job gain was in April 2008, when employers added 231,000 payrolls.

Lastly, from a regional standpoint, the Midwest, Northeast and West continued to add jobs in June, while the South saw a decline of 80,000 positions after 3months of solid gains. Though it is improving, the West still appears to be the region with the toughest job prospects. For the first half of the year, Californians andother Westerners lost 45,000 payroll positions, while the Midwest added 948,000 with the Northeast (+198,000) and South (+198,000) also posting net employment gains.

1,000

1,500

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4,000

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5,000

5,5006,000

Tousnds

Job Openings and L abor Turnover Survey ( JOLTS) Data

H ires Openings Layoffs and D isc harges Qui ts Tot al Separat ions

-825

-625

-425

-225

-25

175

375

T

Net Jobs Added to the Economy (Hires - Total Separat ions): Jan 2008-June2010

Total Net Jobs Net Jobs Excluding Government


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-7,000

-6,000

-5,000

-4,000

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-2,000

-1,000

0

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Roll ing 12-M onth Employment Gain/Loss: Nov 2 001- June 2010

-200

-150

-100

-50

0

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100

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Net Jobs Gained/Lost by Region: Past 12 M onths

Midwest Northeast South West

4,087

2,854

1,9531,772

4,1554,254

2,937

2,034 1,961

4,351

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1,500

2,000

2,500

3,000

3,500

4,000

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Hires Openings Layoffs andDischarges

Quits Total Separations

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Monthly JOLTS Data: Jan 2010 versus June 2010

Jan-10 Jun-10

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Hires

Openings

Separations

Hires

Openings

Separations

Hires

Openings

Separations

Hires

Openings

Separations

Midwest Northeast South West

T

Regional JOLTS Data : January 2010 vs June 2010

January June


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U.S. EQUITIES

M jumped 5.9% after reporting second quarter profit of 35 cents a share, compared with the average analyst estimate of 29 cents. Shares of MEE fell6.4% on news that company executives will be subpoenaed in the investigation of Aprils deadly West Virginia coal mine explosion that a safety regulatorcalled a preventable occurrence on Wednesday. A Robert W. Baird note said that BRCM (-6.1%) could see a deceleration of orders in September and islikely to miss its current quarter revenue forecast.

Important Conferences/Corporate Meetings Today:BofA Merrill Lynch Specialty Pharmaceuticals Conference Southampton, NYCanaccord Adams Global Growth Conference Boston, MA

Goldman Sachs Annual Power and Utility ConferenceJefferies Global Industrial and A&D Conference New York, NYMorgan Keegan Technology Conference New York, NY

Important Earnings Today (with Estimates) From

Source: Thomson ONE

Three Day (High 1126.75; Low 1085.00):Prior Day SPX (High 1116.89; Low 1088.55; Close 1089.47):

S&P Futures

One Day (High 1119.75; Low 1085.00):

ADSK: $0.20 BYI: $0.57 BLOKA: $-0.27 EAT: $0.46 DV: $0.82

DNEX: $0.79 EL: $0.30 KSS: $0.81JWN: $0.66 NVDA: $0.11

PRGO: $0.67 RGLD: $0.25 SLE: $0.20 WEN: $0.05Source: Bloomberg


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FIXED INCOME

Source: Bloomberg

Todays Important Economic Indicators/Events:Jobless Claims: 460K Import and Export Prices Federal Reserve Governor Elizabeth Duke speaks in Chicago 12:30pm

Source: Bloomberg

Treasuries rallied Wednesday, with benchmark 10-year yields dropping to a 16 month intraday low of 2.6814%, after the Federal Reserve said Tuesdaythat the economic recovery was likely more modest than previously expected. Two-year note yields fell to the lowest on record (0.4892%). Thegovernments $24 billion sale of 10-year notes drew the lowest yield since January 2009 (2.730%), while coverage of 3.04 times was slightly below theaverage of 3.06 times over the past 10 offerings. Indirect bidders accounted for 57% of the purchases, compared with a 52% average.


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Top Online Social Networking Stories

Latest Popular Digg.com Business Stories:Its Official: Epix, Netflix Announce Multi-Year Deal for Streaming Movies - http://mediamemo.allthingsd.com/20100810/its-official-epix-netflix-announce-

multi-year-deal-for-streaming-movies/Should We Raise Tax Rates on the Rich? - http://www.theatlantic.com/business/archive/2010/08/should-we-raise-tax-rates-on-the-rich/61182/Calculated RiskTrade Deficit increases sharply in June - http://www.calculatedriskblog.com/2010/08/trade-deficit-increases-sharply-in-june.htmlMBA: Mortgage Applications Essentially Unchanged Despite Low Rates - http://www.calculatedriskblog.com/2010/08/mba-mortgage-applications-

essentially.htmlQuantitative Neutrality - http://www.calculatedriskblog.com/2010/08/quantitative-neutrality.htmlNY Fed: Technical Note on Reinvestment - http://www.calculatedriskblog.com/2010/08/ny-fed-technical-note-on-reinvestment.htmlLowell: The Natural History of a Rumor - http://www.calculatedriskblog.com/2010/08/lowell-natural-history-of-rumor.htmlThe Big PictureRoad to Nowhere? - http://www.ritholtz.com/blog/2010/08/road-to-nowhere/Comparing FOMC Statements - http://www.ritholtz.com/blog/2010/08/comparing-fomc-statements/CPI, CRB Do Not Disprove Deflation Thesis - http://www.ritholtz.com/blog/2010/08/cpi-crb-do-not-disprove-deflation/Robert Reichs BlogConfessions of a Class Worrier - http://robertreich.org/post/932556288/confessions-of-a-class-worrierZero Hedge Trade Deficit Surges to Highest Since October 2008, Trounces Expectations; Q2 GDP to Be Revised to Sub-1% - http://www.zerohedge.com/article/trade-

deficit-surges-highest-october-2008-trounces-expectations-q2-gdp-be-revised-sub-1 Visualizing Job Prospects by State - http://www.zerohedge.com/article/visualizing-job-prospects-stateBespoke Investment GroupUp 100% in 2010 - http://www.bespokeinvest.com/thinkbig/2010/8/10/up-100-in-2010.htmlDemocrats Now the House Underdogs - http://www.bespokeinvest.com/thinkbig/2010/8/10/democrats-now-the-house-underdogs.htmlEconomistMom Social Security: A Small Problem That Still Grows Bigger Over Time - http://economistmom.com/2010/08/social-security-a-small-problem-that-still-grows-

bigger-over-time/


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