Before the Open (Jan 10)

Good morning. Happy Friday. Happy Employment Numbers Day.
The Asian/Pacific markets closed mixed. China dropped 0.7%; Indonesia and New Zealand rallied better than 1%. Europe is currently up across the board. France, Germany, Norway, Switzerland, London, Italy and Greece are posting solid gains. Futures here in the States point towards a moderate gap up open for the cash market, but this of course will change when the employment data is released.

The dollar is up. Oil and copper are up. Gold and silver are up.
Here’s the rut the market has been in the last week. The breadth indicators started to roll over at the end of December, and instead of correcting with a price decline, the market has been correcting with time. Progress is being made, but more time is needed for the indicators to completely cycle.

This is perfectly normal movement for a strong and healthy market.
Here are the employment numbers…
unemployment rate: 6.7% (was 7.0% last month)
nonfarm payrolls: +74K
private payrolls:
average workweek: down 0.1 hour to 34.4
hourly wages: up 2 cents to $24.17
labor participation rate drops to 62.8%
November job gain raised from 203K to 241K
October job gain unchanged at 200K
These are not good numbers…S&P futures dropped from being up 7.5 to being down 3, and now they back up to +4.
As I stated yesterday, the weekly jobless claims number is more important than the monthly unemployment data, so these numbers, in my opinion, are food for the media to chew on. But no doubt the lower unemployment rate will be the headline number, which could bring more buyers to the market if they believe the train is leaving the station.
News trumps the charts. Let’s see what shakes out the first hour.
Stock headlines from barchart.com…
Tiffany (TIF +0.34%) said holiday sales were up 6% y/y and that it sees fiscal 2013 EPS ex-items $3.65-$3.75, well above consensus of $3.52.
Microsoft (MSFT -0.64%) was upgraded to ‘Overweight’ from ‘Equal Weight’ at Barclays.
Infosys (INFY +0.70%) rose 3% in pre-market trading after it reported Q3 EPS of 81 cents, better than consensus of 75 cents, and raised its fiscal 2014 revenue growth outlook to 11.5%-12% from 9%-10%.
Target (TGT +1.04%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman.
Eli Lilly (LLY +1.12%) was downgraded to ‘Underweight’ from ‘Equal Weight’ at Barclays.
Citigroup raised its price target on Monsanto (MON -2.90%) to $133 from $122 and keeps its ‘Buy’ rating on the stock.
ESPN reported that Notre Dame will sign an equipment deal with Under Armour (UA +1.14%) to wear the company’s gear in all sports when the university’s current deal with Adidas (ADDYY -1.37%) expires at the end of the school year.
Abercrombie & Fitch (ANF +0.88%) jumped over 13% in after-hours trading after it hiked its fiscal year adjusted EPS view to $1.55-$1.65 from $1.40-$1.50, above consensus of $1.47.
Royce & Associates reported a 7.17% passive stake in GSE Holding (GSE -5.50%) and a 6.65% passive stake in Genesco (GCO -0.55%) .
Sears (SHLD -3.18%) plunged 14% in after-hours trading after it said it sees a full year adjusted EPS loss of -$7.64 to -$8.61, a larger loss than consensus of -$6.20.
Paychex (PAYX -0.51%) was downgraded to ‘Underperform’ from ‘Sector Perform’ at RBC Capital.
Shoe Carnival (SCVL -1.90%) fell over 8% in after-hours trading after it lowered guidance on Q4 diluted EPS to 3 cents-6 cents, well below consensus of 21 cents.
SYNNEX (SNX +1.93%) reported Q4 EPS of $1.20, better than consensus of $1.18.
Alcoa (AA -1.29%) fell over 5% in after-hours trading after it reported Q4 adjusted EPS of 4 cents, below consensus of 6 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Nonfarm payrolls
8:30 Nonfarm private payrolls
8:30 Unemployment Rate
8:30 Hourly Earnings
8:30 Average Workweek
10:00 Wholesale Trade
Notable earnings before today’s open: INFY
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers