Scott Redler: World markets are mixed as everyone tries to make sense of Friday’s US jobs data and its implications for future monetary policy. Europe is up small, the Nikkei up small and Shanghai is flattish. The jobs report was a double dose of bad news, as not only did the US economy create only 74,000 jobs in December, but we saw a mass exodus from the labor force that sent the unemployment rate down to 6.7%. Labor force participation is now at a 36-year low.
Anyway, there is not much we can do about the Fed or what goes on in Washington. We can only control our process and measure the composure of the markets on many timeframes. This week really kicks off earnings week. Now we get to see how corporate America is doing just as a Goldman Sachs analyst says the S&P is overvalued on most metrics. It should be an interesting few sessions/weeks.
This week is heavy on bank earnings: JPM/WFC Tues morning 1/14, BAC Wed morning 1/15, BBT/C/GS/HBAN/PNC Thurs morning 1/16, AXP/COF Thurs night 1/16, and BK/CMA/MS/STI Fri morning 1/17. In tech, LLTC kicks things off Tues night but the big focus will be on INTC (Thurs night). Brightening PC outlook for 2014 has some people more optimistic about INTC earnings. In addition to banks and tech, the other big reports scheduled during the week of 1/13 are Michael Page/SABMiller (Tues morning 1/14), Burberry (Wed morning 1/15), Carrefour/Rio Tinto/UNH (Thurs morning 1/16) and GE/SLB (Fri morning 1/17). Earnings season will get even busier during the week of 1/20.
S&P futures are down 5-6 handles this morning as so far we’ve absorbed a big 4th quarter move from 2013 on top of a lofty gains for that year. The question is, which way does this range resolve? We have support at 1832 and then the 2014 lows of 1823. Pivot resistance is 1843-1849.
In today’s Morning Call we will check the temperature of some key sectors.
The PowerShares QQQ Trust, Series 1 (ETF)(NASDAQ:QQQ) continues to