Market Indicators for the week

1. I s su e 13 , Vo lu me 5 / Fe br u ar y 3 , 2 012
Employment Gaining More and More Momentum The Week Ahead -> The “Keys”
Tim McLaughlin - A Super week ahead on the heels of positive employment
A banner employment report this morning as employment
data climbed more than forecast in January and the U.S. Date Economic Release Prediction Last
jobless rate unexpectedly fell to the lowest level in three
years, casting some doubt on whether the Federal Reserve 2/5 Super Bowl XLVI: 4 3
can wait until 2014 before raising interest rates. GIANTS vs. Patriots
The 243,000 increase in payrolls was the largest increase 2/7 IBD/TIPP Eco Optimism 47.1 47.5
since April and exceeded all forecasts in a Bloomberg News
2/7 JOLT’s Job Opening - 3161
survey, Labor Department figures showed in Washington.
The unemployment rate dropped to 8.3%, the lowest level 2/8 MBA Mortgage Applications - -2.9%
since February 2009.
2/9 Initial Jobless Claims 370K -
The jump in hiring shows companies are gaining
confidence that the economic expansion will weather the 2/9 Continuing Claims 3525K -
European slump and may boost President Barack Obama’s
2/9 BB Consumer Comfort - -44.8
re-election bid. The data comes one week after Fed policy
makers said the economy wasn’t growing fast enough to 2/9 Wholesale Inventories 0.5% 0.1%
push down the jobless rate, prompting them to extend a
pledge to keep interest rates low for another two years. 2/10 Trade Balance -$48.1B -$47.8B
Based on the data this morning, there are conversations on
trading desks that the Fed may not be able to stay on hold 2/10 U of Michigan Confidence 74.0 75.0
regarding interest rates as long as they think.
2/10 Monthly Budget Statement -$62.5B -$49.8B
The Fed said on January 25th after a two day meeting
that it would keep its benchmark lending rate low “at least” Stock Market and the Super Bowl: Want to know if
until late 2014 from a prior target of mid 2013. “We still have the bulls or bears will be rampaging through the market
a long way to go before the labor market can be said to be this year? Popular wisdom says look to the Super Bowl for
operating normally,” Fed Chairman Ben S. Bernanke told the the answer because a seemingly startling correlation
House Budget Committee in Washington yesterday. appears to exist between who wins the big game and how
“Fortunately, over the past few months, indicators of the market will perform in that calendar year.
spending, production and job market activity have shown
some signs of improvement.” According to the "Super Bowl Indicator," a triumphant
team from the old American Football League (now the
The median projection in the Bloomberg survey called for American Football Conference, or AFC) foreshadows a
a rise of 140,000 payrolls after an initially reported 200,000 down market, but a winner from the old NFL (now the
gain in December. Estimates of the 89 economists ranged National Football Conference, or NFC) means dust off
from increases of 95,000 to 225,000. Revisions also added a your red cape, because the bulls are coming.
total of 60,000 additional jobs to payrolls in November and
December. The Labor Department revised December’s gain The Super Bowl Indicator has been on the money 35
to 203,000. years out of 45 (as measured by the Dow Jones Industrial
Average), which represents a success rate of over 78%.
Takeaway: Fantastic news for the economy and for
consumer confidence, particularly home seekers on the FYI: As of this morning, the Dow is up 5.2% for the
fence. A slight retracement in rates given this morning’s year, the S&P 500 is up 6.7%, and the NASDAQ is up a
news, but rates still at historical lows with 30 year terms in whopping 11.3% YTD.
the mid to high 3’s and 10-15 years in the high 2’s/low 3’s.
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