Thursday, October 7, 2010

Markets waffle ahead of tomorrow's jobs report

Weaker commodity prices are being blamed for lower stock prices (although MLPs were not disturbed). Dow was off 19, decliners only modestly ahead of advancers & NAZ gained 3. Bank stocks slipped as the Financial Index has been in a sideways pattern for more than a year.

S&P 500 FINANCIALS INDEX

Value	197.42
Change	-0.85 (-0.4%)

The Alerian MLP Index continues surging, gaining 2½ to another record in the 346s. The REIT index was up a fraction in the 215s, helped by a favorable article. Junk bond funds were mixed at their relatively lofty levels. Treasuries continue strong. The yield on the 10 year Treasury bond slipped a fraction of a basis point to 2.39% while the 2 year Treasury is only yielding 0.35%. Holding a $1000 note for 2 years earns a total of only $7 in interest & buyers are happy with that!

Treasury yield

U.S. 3-month		0.11%
U.S. 2-year		0.35%
U.S. 10-year		2.39%

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

10-Year Treasury Yld Index --- 2 weeks

Oil tumbled from a 5-month high after the dollar rebounded & US equities declined, wiping out an early advance. Some call that profit taking. Gold fell from its record levels on speculation that the rally was overdone, another dose of profit taking.

CLX10.NYM

...Crude Oil Nov 10

...81.37

...

1.86

(2.2%)

GCV10.CMX

...Gold Oct 10

......1,334.80 ...

11.60

(0.9%)

** Gold Super Cycle **

Click Here

Jobless claims unexpectedly dropped 11K to 445K in the last week, the fewest since July 10. But that failed to ignite the markets. The total number receiving unemployment insurance decreased & those getting extended payments jumped, typical muddled results which are difficult to understand. The 4-week moving average dropped 3K to 455K, the 6th consecutive decrease. The number continuing to receive jobless benefits dropped by 48,000K to 4.46M, the lowest since Jun 26.

Jobless Claims in U.S. Hit Three-Month Low

Jobless claims - 1 year

One-Year Chart for Claims (INJCJC:IND)

4 week average claims - 1 year

One-Year Chart for 4 Week Moving Avg (INJCJC4:IND)

% continuing to receive payments 1 year

One-Year Chart for Unemployment SA (INJCSP:IND)

Alcoa (AA), a Dow stock, reported after hours that Q3 net income slid 21% on lower metals prices. EPS was 6¢, above estimates of 5¢ & down from 8¢ last year. Revenue increased 14.6% to $5.3B versus a forecast of $4.95B. AA is one of the first companies to report for Q3 sending early signals about the health of the economy. The stock dropped 17¢ at the close but gained 35¢ in after hours trading & has only been able to lumber along during the recovery (whatever) period.

Alcoa 3Q income dips 21 percentAP

Alcoa - 2 years

Adobe (ADBE) shot up almost $3 (12%) on speculation it will be bought out by Microsoft (MSFT), a Dow stocks. MSFT was up a dime. Stay tuned!

Adobe Shares Surge on Report of Microsoft's Interest in Merger

Adobe --- 3 months

This was another one of those uneventful days. Bulls have to be disappointed that fairly good news for jobless claims did not get a warmer reception. Of course everybody is waiting for the jobs report tomorrow which is expected to be glum. Dow pushed above the 10.8K range it was in for weeks, but now is lacking a follow thru. At least MLPs remain red hot.

Dow Jones Industrials --- 2 weeks