Friday, January 5, 2007

1/5/2007 Morning Market Comment

With December non farm payrolls up more than expected at 167,000 vs the expected 115k and vs the contraction in the ADP report yesterday, along with the upward revision to November non farm payrolls - the dollar is showing that it still has some life left in it. The Euro is down another 85 points nearing the $1.30 mark. Gold is getting hammered again as a result - really taking a one, two punch from not only the stronger dollar but the continued weakness in crude which has fallen to has low as $54.90 per barrel. The gold rout this morning has black box stumbling and fumbling written all over it, with a $9 slide. The $600 retest that I had discussed back in December was a thought that a few of my friends and I came up with in the CMT world. I decided to rescind it after gold's 50- day crossed above the 200 day, but perhaps I was premature... we"ll see.

Motorola lobbed a bomb into the market late in the evening yesterday saying Q4 revenue would amount to $11.6 bln to $11.8 bln and EPS of 23c to 26c per share ex-items versus consensus estimates of $12.0 n;m and 38 cents. That has sent the stock about 10% lower this morning. The company blames weaker than expected sales at its mobile phone division. Isn't this a debacle since Ed Zander is going to be giving a keynote in just 3 days at the Consumer Electronics Show in Las Vegas 3 days from now.

OPCO has downgraded from BUY to neutral;
BOFA is maintaining a BUY - ok, whatever you say guys;
LEHM lowered its target to $22 from $27;
DBAB cut from BUY to HOLD;
BEST, PIPR, CIBC all pretty much go from Outperform to Peerperform. (source for analyst rating info:

Dell Computer's analyst rating was also cut at JPMS (Read the Marketwatch story here).

So even with the stronger employment data, Dow futures are still down by 31 points on the tech woes, though it's not hard to imagine a late session rebound attempt (maybe even earlier) with the decent macro numbers used as an excuse (how many times has that script played out??). Though one certainly wonders how ADP could show a 40k contraction, while the government comes up with a triple digit gain... it's probably just me, though.

The lead paragraph in the Wall Street Journal reads, "BUSH'S NEW STRATEGY for Iraq will entail a 20,000-strong "surge" to secure Baghdad as well as a fresh infusion of money to promote economic growth and job creation, all with an eye toward shoring up the Maliki government." One is left wondering, with the Administration's track record thus far. if this just more lives being wasted along with a tremendous financial cost. Not to get overly political, but the even deeper commitment makes an investment thesis in U.S. markets perhaps even less palatable to many.

If at first you don't suceed, try, try again... The Journal reports the founder of Amaranth may start a new fund: Click here subscription required.

No comments: