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Wall Street's Worst Job Fears Come True


Weak payrolls data seems to have dented Wall Street's confidence further, as indicated by the U.S. index futures, which point to a lower opening on Monday. Additionally, data that showed a faster than expected increase in Chinese consumer prices has tempered hopes of monetary policy easing by China. With very little catalysts to digest for the day, the direction of commodity prices, any potential deal announcements and a speech by Federal Reserve Chairman Ben Bernanke could dictate market mood.

As of 6:30 am ET, the Dow futures are slipping 113 points, the S&P 500 futures are receding 15 points and the Nasdaq 100 futures are declining 28.75 points.

The U.S. non-farm payrolls report released last week showed that the economy added 120,000 jobs in March, the smallest job gains in five months. The increase was far below the 2000,000 plus growth forecast by economists. The private sector added 121,000 jobs, while the government trimmed 1,000 jobs. Nevertheless, the jobless rate based on the household survey ticked down 0.1 points to 8.2 percent despite the number of employed people declining by 31,000.

U.S. stocks reversed course in the truncated week ended April 5th, as some insipid economic numbers made traders uncomfortable, given the fact that the markets are trading at overbought levels.

The unfolding week's economic calendar is filled with a host of Fed speeches, including two public appearances by Bernanke. Traders may also focus on the Beige Book, the jobless claims report and the Reuters and University of Michigan's preliminary consumer sentiment reading.

The Commerce Department's trade balance report for February, the Labor Department's consumer and producer price inflation reports for March, the import and export price indexes for March, the Commerce Department's wholesale inventories report for February, the Treasury's monthly budget report and Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.

The trade balance is expected to show that that export growth quickened, while imports may have also increased due to higher oil prices. BMO Capital Markets is of the view that trade may have deducted from first quarter growth.

The headline consumer price inflation is expected to edge down in March, as the impact of higher gasoline prices may have been neutralizes the deflationary impact of lower home heating costs. The year-over-year rate is also expected to decline modestly, given the faster rate of increase in fuel prices in the year-ago period.

Bernanke will speak to an Atlanta Federal conference at Stone Mountain, Georgia at 7:15 pm ET.

In corporate news, Eli Lilly (LLY) and Avid Radiopharma announced that the FDA has approved Amyvid, a radioactive diagnostic agent indicated for brain imaging of beta-amyloid plaques in patients who are being evaluated for Alzheimer's disease.

Kraft Foods (KFT) announced that it is voluntarily recalling one code data of Planters Cocktail Peanuts sold in 12 oz canisters due to possible exposure to water not intended for use in food during the production process.

Broadcom (BRCM) announced the completion of its acquisition of networking and fiber access Passive Optical Network processor maker BroadLight.

WD-40 Co.'s (WDFC) second quarter results were better than expected and its full year guidance surrounded the consensus estimates.

AZZ Corp. (AZZ) reported better than expected fourth quarter results. For fiscal year 2013, the company expects earnings of $3.25-$3.55 per share on revenues of $475 million to $510 million.

The U.S. Navy awarded Lockheed Martin (LMT) a $1.05 billion 5-year contract to provide more than 200 digital cockpit and integrated mission systems and sensors for the Navy MH-60R "Romeo" and MH-60S "Sierra" helicopters.

The Asian markets that were open for trading closed lower, with the U.S. non-farm payrolls report serving as a drag.

Japan's Nikkei 225 average retreated for the fifth straight session, declining 142.19 points or 1.47 percent to 9,546, marking the lowest closing level since February 21st. The strength of the yen due to its safe haven appeal weighed down on export stocks. Most other stocks also retreated.

China's Shanghai Composite Index ended down 20.78 points or 0.90 percent at 2,286, while India's Sensex, Taiwanese Weighted Average Index and South Korea's Kospi all ended down over 1 percent.

Inflation data released by China showed that the annual rate of consumer price inflation quickened to 3.6 percent in March from 3.2 percent in February. Economists had expected a more modest increase to 3.4 percent.

The major European markets are closed for Easter holidays.

Oil is trading notably lower, while gold futures are firmer. Risk currencies are seeing strength amid thin trading on account of the market holiday in Europe.

by RTTNews Staff Writer

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