Will jobs report keep boosting stocks?
There are good reasons to like how the economy is starting to look. Earnings from Disney, Cisco Systems, Ralph Lauren and Coca-Cola and PepsiCo may confirm the optimism in the week ahead. But watch out for Greece and Iran.
Stocks went up almost everywhere in Europe; Greece, however, was a big exception. Markets rose in the United States, in Brazil, in Mexico. Canadian stocks finally ended higher, despite weak news about that country's economy.
A total of 444 U.S. stocks hit 52-week highs on Friday; 152 of these were all-time highs. These included Apple (AAPL), Intuit (INTU), Intuitive Surgical (ISRG), Visa (V) and Public Storage (PSA).
The report was a game-changer, opined Ian Shepherdson of High-Frequency Economics. The report "points to a rapidly improving labor market," wrote Paul Ashworth of Capital Economics. But Phllippa Dunne and Doug Henwood of the Liscio Report wondered if the gains will be self-sustaining.
There are not a lot of economic reports to answer the question, but next week's earnings reports and events outside the United States may help us find an answer.
Article continues below.
The fact is the market is in remarkable shape.
The Nasdaq Composite Index ($COMPX) finished Friday at an 11-year high. The Standard & Poor's 500 Index's ($INX) 2012 start is its best since 1987. The Dow Jones Industrial Average ($INDU) closed at its best level since May 2008 -- before the Lehman Brothers collapse.
The Dow and S&P 500 are up nearly 100% since their lows in 2009. The Nasdaq is up
129%. The Nasdaq-100 Index ($NDX) has risen 142%, although much of that gain is due to Apple, which is up 453% since the March 9, 2009, bottom.
Greece and Iran could well blow all the optimism to pieces. Greece and its creditors can't seem to cut a deal on restructuring the troubled country's debt, despite assurances for several weeks that a deal is just around the corner.
Iran is more worrisome. Israel is increasingly worried that Iran is building nuclear weapons, and Israeli officials have hinted strongly they might attack Iran to prevent the weapons from getting used.
That may provoke an Iranian retaliation, and oil prices could spike, especially if Iran tries to block the Strait of Hormuz, through which tankers loaded with oil from Persian Gulf nations, including Iran, must pass to supply countries around the world.
|Major indexes since March 2009 market bottom|
|Index||Today||Chg. From 2009 lows|
|Dow Jones Industrials||12,862.23||96.5%|
|Nikkei 225 Index (Japan)||8,831.93||25.19%|
|FTSE 100 (Britain)||5,901.07||68.02%|
|Dax Index (Germany)||6,766.67||84.56%|
Despite Greece and Iran, what's not clear is if the market is getting frothy. Good question, especially when one looks at 1987. The market moved higher from the start, with the S&P 500 up 14% by Feb. 3 and peaking on Aug. 25, up 39% on the year. All of that gain vanished in 39 trading days.
For those keeping score, the Dow is up 5.3% so far in 2012, with the S&P 500 up 6.9% and the Nasdaq up 11.5%.
How about the market and jobs? The good news is that the U.S. economy appears to have stabilized. Auto sales are getting stronger and may top 14 million units domestically this year. There's no question people want their electronic gadgets. They appear willing to travel. To go out to dinner.
We'll find how strong these trends on Tuesday when Walt Disney (DIS) reports its first-fiscal-quarter earnings -- the week's key report.
Watch the results for Disney's theme parks and pay attention to their guidance for the rest of the fiscal year. If the company sees reservations rising, that's a good sign that consumer confidence is growing.
|Markets for the week|
|2/3/2012||1/27/2012||% chg.||YTD chg.|
|U.S. Dollar Index||79.06||79.01||0.06%||-1.82%|
Here's the rest of the lineup for the week.
Monday: Anadarko Petroleum (APC), toymaker Hasbro (HAS) and fast-food operator Yum! Brands (YUM), which has been succeeding very well in China. Watch the guidance for Hasbro's and Yum!'s U.S. businesses.
Tuesday: In addition to Disney, reports are due from BP (BP), Coca-Cola (KO), Nissan Motor (NSANY) and Panera Bread (PNRA). With Panera, same-store sales growth will tell the story.
Wednesday: Cisco Systems (CSCO), General Growth Properties (GGP), Ralph Lauren (RL), Visa and Whole Foods Market (WFM) are the key reports. Cisco has started to see decent growth; its European guidance will be important. If General Growth Properties reports growing sales per square foot in its malls, that's another bit of confirmation.
Thursday: Game-maker Activision Blizzard (ATVI), Dunkin Brands (DNKN), PepsiCo (PEP) and LinkedIn (LNKD). The first three are about the consumer. The last is a way of looking at Facebook's initial public offering. LinkedIn went public at $45 in June, jumped above $100 and crashed to around $60. It's now at $79.88.
Friday: Arch Coal (ACI) and NYSE Euronext (NYX). Arch Coal shares have fallen by about 50% since April, a victim of the glut of natural gas in the United States. NYSE Euronext needs to explain its strategy going forward now that its merger with Deutsche Boerse appears dead.
The economic reports are slim
Here's a quick look at the economic reports.
Consumer credit outstanding, due Tuesday from the Federal Reserve. This should show if consumers are expanding their borrowing. Evidence suggests, mostly from auto sales, that they are.
Jobless claims, due Thursday from the Labor Department. Another report below 400,000 will confirm that Friday's jobs report wasn't a fluke.
Trade deficit, due Friday from the Commerce Department. Look for a small narrowing as exports grow a touch and offset rising oil imports.
Reuters/University of Michigan Consumer Sentiment Index, due Friday. Look to see if the jobs report affects this number.
Its not going to last because of where the number are coming from; the Obama administration.
Just about every day there is a story about this company or that company that's either in financial trouble and is going to lay off or are already laying off because they are in bankruptcy.
US postal service postponed laying off a 128,000 workers until May.
American Air lines is laying of f 15,000 workers.
Sears/Kmart closing stores to save the company; layoffs are beginning.
Boeing and a host of other manufactures have already announced plans to lay off workers this year.
A number of national retailer like Best Buys, Rite Aid are on the verge of going belly up. That means more stores closing and lay offs.
Yea, it would be great if we were in recovery, but we're supposed to believe that we are because Obama or his administration says it. Not in your life time..
Sustainable Jobs Initiative - We in the USA set many: quality, safety, health, environment and wage standards for various reasons. We can not set all these regulations and requirements and not expect that thousands of US American factories, millions of US American jobs, billions of US American dollars, and now the interest and obligation on trillions of US American debt would not be exported in the name of Free Trade. We do not need fewer regulations. We only need Fair Free Trade, a level playing field for the US American worker/producer to compete on for the USA market. Fair Free Trade! (Not Balanced Trade - Exporting a billion dollars of raw materials and importing a billion dollars of “Made In China” consumer goods does not return jobs to US Americans.) Fair Free Trade, where all imports to any given market must meet at least ALL minimum production/providing standards of: quality, safety, health, environment, and wages of the importing country, would bring factories, and sustainable jobs back to the USA. It would put money in the hands of our working domestic consumers, and directly into the hands of working foreign consumers that could then buy more “Made In The USA” products. Go to: manifestry > Trade
YOu believe this crap of lies you are dumber than dirt...
The power of suggestion is a real motivator but it is not putting money in the bank or paying the bills....
The state of the economy is a lot darker than anyone wants to lead on because that's really how bad things are. 5 million foreclosures 10 million behind in payments and another 5 million ready to go belly up this year.
There are no jobs to cover this hole that has been dug...
think of how revlon and 5th avenue will do once the ladies over there can shed those burkas and veils when they want.Sorry active I don't buy it. I am much more worried about The AMERICAN PEOPLE and the economics in this country first. They want to cut military spending in this country yet help fund the military of a middle east country. They need to look at aiding our economic situation first and foremost but we have been sold out to the point we all know that is not going to happen!! The biggest thing we export from this country is our tax dollars. UNACCEPTABLE!!!
The U.S. is due to give Egypt $1.3 billion in military assistance and $250 million in economic aid in 2012.So I guess it is not that the goverment doesn't have money it is that the PRIORITY is not for the AMERICAN PEOPLE. Always enough for their MIDDLE EAST BUDDIES. Must have saved this money from not giving Senior Citizens their COLA for a couple of years. This shows who the US goverment is loyal too.
so vonster, just curious...
"When do we get back to at least the all-time Bush high of 14,700 in 2007?"
why fail to mention that by the time w bush left office he had the dow down to 8,000 and the world on the brink of financial armageddon? have you forgotten?
check out the following to see just where those failed policies got him in the history books:
i mean let's be honest and tell the whole story .... high spending and low taxes (supported by BOTH PARTIES) ruined our country.
Sounds like the same time last year then BAMMM near deadline of deposit to retirement funds
down down down.
Best time to put money in is after Oct ???
Ok toyota, I'll try to interpret the mind of the mentally inferior (you) to dig out any logic from your statement.
"Yeh right around that time Bush and his cronies were plotting on how to steal all the money" Bush and his cronies plotting to steal all that money, 2007, nope doesn't ring a bell. Are you from Prison Planet or somewhere that interprets the housing decline of 07 as "stolen money from the stock market". Hard to follow someone as abjectly stupid as you.
".. Why do you think it got so high? So they could steal it"
My, we are stupid aren't we. They (Bush) "let the market get high", "so they could steal it" the market.
Please, please neanderthal, desist from commenting on a Finance board. This is above your paygrade. Limit yourself to trying to count up your order at Taco Bell to ensure you have enough ones in your wallet to cover it.
....can we say TARP...Remember TARP was the Bush bail-out of October 2008. Yeh, stole the money...
Let's see, TARP stole the money from the market, through a bailout...fascinating insights. Won't you strongly consider checking yourself into a nursing home perhaps in your 40s instead of later on, I think you need it. Really.
Stocks are already higher then they've been in years...Could it be because we have an intelligent President now who knows how to run a country....Thank you Obama for being you.
Southwest Airlines/Careers is hiring in Dallas, Rhode Island and Maryland...check it out Democrats....Republicans need not apply...
We're still 2000 below where we were 5 years ago. Which is pretty crappy. We do have an intelligent president but one who is convinced in failed leftwing big government policies, unlike Clinton. The results are the slowest recovery since the Great Depression. We still have almost 4% more unemployment than we did at the start of the recession. We should never try this failed idea that a lot of government spending through various bad ideas for projects is the way to go in a recession. What a failure.
Oh Southwest is hiring. There's evidence of good govt policy. Tax cuts under Reagan led to more jobs in one month of his 3rd year in office September 1983, than have been created in the last 6 months combined. With a much smaller population back then. Pathetic.
well there you go again ... trying to re-write history ... for what purpose?
"The record of the 2009 stimulus is that we should never ever ever attempt that kind of big government approach after a downturn."
stimulus is a fiscal policy decision that spends money - it does not correlate to "big government" which certainly is a problem - but a separate problem from fiscal stimulus
the lack of adequate fiscal stimulus and monetary easing led directly to the deflationary spiral that mushroomed into the great depression. that's a fact. anything, and i mean anything, needs to be done to first save the patients life - then when stable additional steps may be taken. stop blaming the e medical team that saved America's life and blame the folks who got us into the accident.
speaking of them - you seem focused on obama/democrats and conveniently (disturbingly) forget the history of the national debt growing from less than $2 trillion pre-reagan to the bush years:
"To put that into perspective, when President George W. Bush took office, our national debt was $5.768 trillion. By the time Bush left office, it had nearly DOUBLED, to $10.626 trillion. So Bush's record on deficit spending was not good at all: During his presidency, the national debt rose by an average of $607 billion a year."
the wars, the welfare, the entitlement spending, the tax welfare for the rich .... BOTH PARTIES HAD PRETTY MUCH EQUAL SHARES OF THE BLAME FOR THE ACCIDENT!!
do some reading and research with a big pot brewing at your side ... breathe deeply and awaken ...
p.s. "Nothing in your ramble made any sense." you might want to reality-check those thingies to see where you stand on that one .... just sayin' ....
Naw, that fuzzy math, jobs report wont last long....
First time Anyone brings up that over used slang, Greek debt woes..! WOW
Its the signal to sell and sell fast...lol
lol vons, that makes no economic or mathematical sense whatsoever!
"The record of recent presidents in the 2 years after unemployment reached its peak during a recession: etc."
any idiot or even a drunken monkey could increase employment as long as they raised the national debt a trillion dollars (in bush's case $5 trillion+). your type of spend wildly but don't tax thought process is exactly the mentality (i should say lack of mentality) that put us in this hole.
what nonsense. yeeeeesh.
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[BRIEFING.COM] The S&P 500 settled lower by 0.8% after early strength turned into afternoon weakness.
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