October 4, 2012
I will be in New York all this week through late next Monday on the job hunt. If you can spare a few minutes of time, please take a moment to think about contacts you have that would be willing to speak with me regarding their own career path in finance, and current opportunities in the industry. Thank you all for your support.
The S&P 500 climbed higher for a third day, rising +0.4%, as better-than-forecast growth in American employment and service industries offset concern about China’s economy. ADP Employer Services said companies added 162K jobs last month, topping the median estimate of 38 economists surveyed by Bloomberg for a 140K advance. Stocks of homebuilders rallied as mortgage applications climbed to their highest level in three years. Volume for exchange-listed stocks in the U.S. came in +4.4% higher than its three-month average.
Sentiment is higher this morning, with the S&P 500 rising for a fourth day after jobless claims increased less than forecast by economists and policy makers in Europe continued to hold borrowing costs at record lows. “The jobless claims report was okay and Draghi is signaling he will do whatever it takes, so I’m not expecting him to take his foot off the accelerator,” Philip Orlando, the New York- based chief equity strategist at Federated Investors Inc. which oversees about $370 billion, said in a phone interview. “Every data point in the U.S. will be viewed through a market prism and a political prism now.”
Today’s Economic Data Lineup (EST)
7:00 am: Bank of England announces interest rates
7:30am: Challenger Job Cuts Y/y, Sept. (prior -36.9%)
7:45 am: ECB announces interest rates
8:00am: RBC Consumer Outlook Index, Oct. (prior 50.4)
8:30 am: ECB’s Draghi holds news conference
8:30am: Initial Jobless Claims, Sept. 29 est. 370k (prior 359k)
8:30am: Continuing Claims, Sept. 22 est. 3.275m (prior 3.271m)
9:45am: Bloomberg Consumer Comfort, Sept. 30 (-39.6)
10:00am: Factory Orders, Aug. est. -5.9% (prior 2.8%)
11:00 am: U.S. to announce plans for sale 3-yr, 10-yr and 30-yr debt
11:00 am: Fed to purchase $1.75b-$2.25b notes due 2/15/2036-8/15/2042
12:00pm: Fed issues Minutes of FOMC Meeting
8:00pm: Fed’s Bullard speaks in Memphis, Tennessee, on economy
- Applications for jobless benefits in the U.S. increased 4K to 367K in the week ended Sept. 29, in-line with the median forecast calling for 370K claims. Futures on America’s equity indices rallied after the report.
- Orders placed at U.S. factories fell in August by the most in three years, with a -5.2% decrease in bookings that followed a +2.6 increase in August.
- World food prices rose in Sept. to the highest in six months as dairy and meat producers pass along higher feed costs to consumers, according to the United Nations Food & Agricultural Organization (FAO). An index of 55 food items the FAO tracks rose 215.8 points from a revised 212.8 points in August.
- The ECB decided to today to leave interest rates on hold as President Mario Draghi waits for Spain to determine if its needs help. “From an economic perspective, we don’t need another ECB rate cut,” said Christian Melzer, an economist at Dekabank in Frankfurt. “The focus isn’t on rate changes but on Spain and a possible request for aid paving the way for the ECB bond program. It’s up to Spain to make a move now.”
- ECB President Mario Draghi said the bank is ready to start buying government bonds “once all the prerequisites are in place,” today at a press conference in Ljubljana, Slovenia, after policy makers left the benchmark rate at a historic low of 0.75%. The plan has “helped to alleviate tensions over the past few weeks” and “it is now essential that governments continue to implement the necessary steps to reduce both fiscal and structural imbalances,” Draghi said.
- BOE officials voted to complete their latest round of stimulus, leaving the bond purchase target at £375B as expected, amid intensifying dissent on inflation risks that threatens to cause a rift on future aid for the economy. They also left their key interest rate unchanged at a record low of 0.5%.
- Turkey’s parliament approved a motion allowing the government to order military action against Syria after a shell fired across the border killed five Turks. “Turkey has no intention to spark war, but the government felt the pressure to respond in the face of killings of its citizens, to avoid public reaction,” said Atilla Sandikli, a former army officer and chairman of the Istanbul-based think- tank Bilgesam.
“In the end, you’ll know which people really love you. They’re the ones who see you for who you are and, no matter what, always find a way to be at your side.”
-Randy K. Milholland
Global Market Strategist
C 901 494 7376