Into the trading week, (April 9- )

While this week’s market cries for QE, the much weaker NFP# is not a done ‘QE’ deal as many would like to believe.  Main reason is one report of anything does not make a ‘trend’.  Now, Initial claims are a ‘trend’ and this weeks # didn’t disappoint or point NFP# to a new trend.  Also, the avg. is still >200k in ‘12 and other factors such as work week, hrly earnings provide support. 

*Note, if FED was to commence any QE off just poor NFP#’s ahead, it would be negative for equities as it would imply poor growth ahead expectations. 

At first, market has reacted as would be suspected, equities futures sunk, gold rose and TSY yields stumbled.... “ A few other supports are in the 1370’s.…”It would’ve been ideal spot for dip buyers to pounce….., but no such luck today!.”,(22-03).   Likely and ‘Luckily’, it might have happened this time while cash markets are closed with ES falling to low of 1372 (1375 closed at). The Feb peak and May 11 SP cash peaks should hold and this will likely be another shallow pullback.  A correction will occur later if/ when (May?) market closes sub 1370 consecutively.

Trading was skewed to fast traders dictating moves in ES/ ETF in the latter part of this week owing to thin holiday liquidity and they will continue to play into Monday’s open. But, investors will likely buy the opportunity and single stocks will likely come out looking fine.

Europe,  Spanish bonds/yields will continue to be in focus.  Last Thursday, ECB’ Draghi basically said jump in borrowing costs is market saying governments need to deliver without the expectation of ECB help.  Focus is on individual govt’s now to act in good faith after liquidity injections. This bump in yields is not like year’s bumps, it’s not fear of systemic risk at this point as before.

China,  Shang' opened up well post PMI, eyes will be on more April data covering March to see if growth has stabilized after probable distortions from New Year holidays, which usually makes for patchy data in Q1.  Some key indicators coming up this week and next.

When the debate here of QE vs. growth was lingering, a small possibility was that of ‘escape velocity’ growth. Appreciably stronger growth was never seen and/or discussed here.  The disappointing  NFP#  takes the upside risk of escape velocity off the table.   We’ll be back to moderate growth forecasts as was the expectation before ‘escape velocity’ talk made the TV circuit rounds.

All in, NFP is the sole data pointing to the economy rolling over.  Other related data is still showing strength and so more negative signals (so far just only small spots ie. Auto’s,construction declines in Feb.) are needed to become believers in NFP# to an economy losing momentum.

U.S  eco' data this week is on the quiet side, includes Initial claims/ International trade #’s (Q1 GDP related)

Into last weeks trading, noted to watch for pre-announcements. We got a bunch from some known tech names, SNDK, PLCM, PMTC.  This was quite disappointing heading into reporting season as it’s a change from ORCL, ACN recently.  Adds fuel to an already projected messy and lackluster picture for EPS season.