February 4, 2010: Employment Anticipation
February 4th, 2010
This morning, Weekly Jobless Claims came in weaker-than-expected and the market started scratching its head again. The mood creeping into trading psychology today is much the same as it was in January. As January progressed, price action suggested that investors were beginning to question the validity and longevity of the rally that began like an explosion back in March 2009.
After the close yesterday, CSCO reported earnings and investors were immediately encouraged as demonstrated by the post-close 4.5% rally. CSCO set its January 2010 high on January 15 at 25.10; up 84.4% from its 2009 low on March 9. CSCO pulled back from the January high by 10.9% over a nine-day period but began to recover a bit before earnings. While the stock is rallying, that enthusiasm is somewhat contained as the Major Averages and S&P Sectors are down by 1.70% to 3.50%.
January ADP Employment came out yesterday (-22,000) and even with the upward revision to December’s job-loss to -61,000 (previously reported at -84,000), investors came away with an uneasy message….employment is not improving as quickly as the market would like and less-bad does not mean good.
Tomorrow at 8:30 we get the BLS Employment for January. Analyst consensus is +5,000 jobs with a 10.1% unemployment rate. With a sell-the-news mentality that seems to be gaining influence and strength, investors appear to be bracing for very disappointing news.
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