Thursday, March 6, 2014

The Morning Read

Good morning, folks. Lots to do today, but here are some reads.
"Stock market bubbles don’t grow out of thin air. They have a solid basis in reality — but reality as distorted by a misconception.”

- George Soros

Today's note will be short - I got a late start to things and have a fair amount to do before the opening bell rings. And to be honest, yesterday's action was quiet - US markets traded in the tightest range I have seen for a while.

Today, Mario Draghi at the ECB will update the world on whether or not they will sterilize SMP (Securities Market Program) purchases. In other words, whether or not the ECB will continue to buy bank assets as a form of QE.

Asian trading saw markets move slightly higher - the Nikkei was the outperformer, tacking on 1.59%; Hong Kong added 0.55% and Shanghai picked up 0.45%. Euro-markets are trading quietly ahead of the ECB's announcment - the FTSE is up 0.20%, with the DAX trading up 0.22%. I imagine we will continue to see tight-ish trading in the US also, as traders position themselves ahead of tomorrow's NFP data.

My quick take on tomorrow's payroll numbers: the only way I see equities sell off considerably is if jobs data comes in much firmer than expected. Consensus expectations are for a 140k increase in payrolls, so anything above 175k or so I feel would be "too good." If the number comes in within a 10-15% range in either direction of expectations, I am willing to wager that you will see stocks get bid up. Everyone is discounting recent economic data due to the weather, anyway.

Put the odds in your favor today, my friends.

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