David Moenning�s Daily State of the Markets: 11/07
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Of Little Importance
After the jobs report was released on Friday, the rest of the session proceeded to be of little importance. Basically stocks languished below breakeven until someone finally ran a buy program or two in the last half hour, which managed to put a nice little finish on the day. Volume, which has been impressive of late, was definitely sub par, and breadth reflected the general malaise of the day.
Make no mistake about it, the jobs report was the primary focus of the session. The drop in oil prices (crude futures fell -$1.20) was able to generate some attention, but it was the data from the BLS that had traders thinking and then rethinking the situation during the day. You see, up until the release of Friday�s report, the recent economic data had given traders the impression that the economy was definitely hitting on all cylinders. This was encouraging to stock investors since it meant that the economy had handled the hurricanes and was more than likely going to be able to withstand an uptick in inflation and another couple of rate hikes as well.
Normally the bulls might have been able to use the weakness in the jobs report to their advantage by suggesting that the Fed may need to discontinue their hiking excursion sooner rather than later. But in this case, the 0.5% jump in hourly earnings prompted additional inflation concerns, which is unlikely to be lost on Mr. Greenspan and company. While the increased in wages is definitely a plus for the workers, it also is fuel for the inflation cycle. Higher costs lead to a need for higher wages, which leads to companies increasing prices, which leads to � well, you get the idea.
Turning to this morning, there appears to be a little more enthusiasm in the markets so far. Oil prices continue to pull back with crude futures currently trading down -$0.51 to $60.07. Bond yields are pulling back a bit from Friday�s highs for the year and stock futures are pointing to a green open for the market.
Stocks "In Play" This Morning:
(NASDAQ: AMAT) � Bear Stearns suggests company will exceed expectations
(NYSE: GDT) � Reports $0.32 vs. $0.51 and files suit against JNJ to complete merger
(NASDAQ: MSFT) � NY Times says company Is lead suitor for stake in AOL
(NASDAQ: QCOM) � Announces 2.5 million share buyback
(NASDAQ: WFMI) � Downgraded at Adams Harkness
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMAT
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
After the jobs report was released on Friday, the rest of the session proceeded to be of little importance. Basically stocks languished below breakeven until someone finally ran a buy program or two in the last half hour, which managed to put a nice little finish on the day. Volume, which has been impressive of late, was definitely sub par, and breadth reflected the general malaise of the day.
Make no mistake about it, the jobs report was the primary focus of the session. The drop in oil prices (crude futures fell -$1.20) was able to generate some attention, but it was the data from the BLS that had traders thinking and then rethinking the situation during the day. You see, up until the release of Friday�s report, the recent economic data had given traders the impression that the economy was definitely hitting on all cylinders. This was encouraging to stock investors since it meant that the economy had handled the hurricanes and was more than likely going to be able to withstand an uptick in inflation and another couple of rate hikes as well.
Normally the bulls might have been able to use the weakness in the jobs report to their advantage by suggesting that the Fed may need to discontinue their hiking excursion sooner rather than later. But in this case, the 0.5% jump in hourly earnings prompted additional inflation concerns, which is unlikely to be lost on Mr. Greenspan and company. While the increased in wages is definitely a plus for the workers, it also is fuel for the inflation cycle. Higher costs lead to a need for higher wages, which leads to companies increasing prices, which leads to � well, you get the idea.
Turning to this morning, there appears to be a little more enthusiasm in the markets so far. Oil prices continue to pull back with crude futures currently trading down -$0.51 to $60.07. Bond yields are pulling back a bit from Friday�s highs for the year and stock futures are pointing to a green open for the market.
Stocks "In Play" This Morning:
(NASDAQ: AMAT) � Bear Stearns suggests company will exceed expectations
(NYSE: GDT) � Reports $0.32 vs. $0.51 and files suit against JNJ to complete merger
(NASDAQ: MSFT) � NY Times says company Is lead suitor for stake in AOL
(NASDAQ: QCOM) � Announces 2.5 million share buyback
(NASDAQ: WFMI) � Downgraded at Adams Harkness
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMAT
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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