..a full table
Friday, January 7, 2011 at 07:32AM Due to ‘better than expected eco’ data’ in US/ Europe the past few weeks the market is quietly worrying about ‘easy money’ being cut off following in the footsteps of China. This was first evident in the Precious metals sell off / strengthening USD post hotter Euro inflation number this week as it raised concerns of ECB hiking before Q4. The US escaped this by FOMC minutes this week as ‘no end’ to QE2 was signalled, but a lot has occurred since meeting in the way of US data points. On Friday, it is not only the NFP# that might be a market mover, but maybe more importantly, Bernanke coming in front of the Senate at 930am that will put the QE2 issue at the forefront.
Wary- 1) Bernanke any sign of ‘hawkish’ remarks (any signs of QE2 not being entirely fulfilled).
2) NFP#- a big beat (1 forecast 400+) will likely cause QE2 fear ending sooner than 6mths. This may result in a note here from late Dec….” Starting to think the way to derail this rally and correct……In this scenario, the market rallies off a good catalyst, but it becomes evident there is no conviction force behind it and the rally peters out. Something to watch for later.” .
3) Heightened expectations for NFP # now, 200k is whisper (consensus 170K). If # below ~160, it may disappoint and cause selling. November revisions will also be in focus.
Positive- reporting season is around the corner and that may cause Shorts from being too aggressive in laying out exposure if things don’t go the Bulls way with the above.
Shadowlist
- Momentum/earnings/“winners of ‘10 – Outperformed again as Software, clouds ,networking stocks work. RVBD new high, FFIV looks to be setting up and CAVM popped another 5-6% intraday.
- Commodities - Once again Ag’s/Chems do well led by a big POT day. USD strength/ Euro technical breakdown.. 1.26 next??? is an issue. If this continues it will likely begin to curb all commodity linked groups not affected yet. “Rare” stuff got a beating as reports Japan got more of the stuff last year than was expected.
- Consumer - a pretty big disappointment (off >1%) on same store sales.
- Financials - off 1%, mostly on downgrades in Banks. Overall Financials are coming up to technical resistance of note.