Equity indices remain higher after favorable jobs data but off highs

Discussion in 'Data Sets and Feeds' started by TradeTheNews, Mar 9, 2007.

  1. TradeTheNews

    TradeTheNews ET Sponsor

    Market Update by Trade the News Staff

    Dow +31, S&P +4, Nasdaq +6

    Equity indices moved higher this morning after favorable jobs data showed that the economy was not slowing as much as feared. Change in Nonfarm Payrolls came in a 97k v an expected 95k with the prior month revised higher to 146k from 111k, the unemployment rate declined to 4.5%, Manufacturing Payrolls were down 14k (less than expected) and Average Hourly Earnings rose 0.4%. The data was enough to alleviate the most dire forecasts of an economic slowdown and S&P futures quickly moved ahead by 10 points. Fed Fund Futures also quickly removed much of the rate cut expectations in 2007 that had been building over the last couple of weeks. Markets were unable to hold the initial levels of euphoria as doubts do remain about the pace of growth. However, equity markets remain higher, paced by the materials and energy sectors and all of the 10 major S&P sectors are positive.
    - Treasuries are trading lower after the Feb. employment report, which though largely came in line with expectations, saw a positive NFP revision in Jan. to +146K from +111K. Traders reported buying on short covering on the lows as the 10Y yield approached 4.6%. Supporting prices are continuing concerns over the sub-prime mortgage sector, with New Century Financial trading lower by more than 20% today after falling sharply yesterday and Accredited Lenders falling about 8%. The 30Y future is down 28 ticks at 112 14/32, the 10Y future is off 20 ticks at 108 10/32 and the 2Y future is off 8 ticks at 102 10/32.
    - Energy futures have seen declines across the board on forecasts of above normal temperatures over the next week and on expectations that OPEC will not announce new output cuts when it meets next week on the 15th. Venezuela said earlier today that the priority at OPEC's meeting will be on compliance of existing production cuts. Additionally, a spokesperson for Royal Dutch Shell said that a team of investigators in Nigeria gained access to the oil spill, but that the company was uncertain how soon the probe will take and how soon production could be restored. The leak forced the company on Sunday to shut production by 187K b/d. Crude futures are down $0.87 at $60.77, unleaded gasoline futures are off 2 cents or 1% and natural gas is lower by $0.06 at $.7.17.
    - In currencies, the dollar is trading mixed against major currencies at midday. The dollar strengthened in the wake of the Feb. employment report, but since has stabilized expect against the Canadian dollar, which is posting strong gains. The Canadian dollar has benefited from a stronger than expected Feb. employment report as well as positive data on the international merchandise trade balance for Jan. EUR/USD is down 16 pips at 1.3117. USD/JPY is up 55 pips at Y118.33 and USD/CAD is off 86 pips at C$1.1716.