Before the Open (Jun 3)

Good morning. Happy Friday (is it Friday already)? Happy employment numbers day.
The Asian/Pacific markets closed up across-the-board. Australia led with a 0.7% gain; Japan, Hong Kong, China, Singapore and Indonesia also did well. Europe is currently mostly up. London, Greece, Poland, Turkey and Finland are up more than 1%; Germany, France and the Netherlands are also doing well. Prior to the release of the employment numbers, futures here in the States were flat.
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The dollar is flat. Oil is down a small amount; copper is up. Gold and silver are up small amounts. Bonds are up.
Here are the employment numbers…
unemployment rate: 4.7% (was 5.0% last month) (664K people left the job force)
nonfarm payrolls: +38K (smallest since 2010)
private payrolls:
average workweek: flat at 34.4 hours
hourly wages: up 5 cents to $25.59
labor participation rate: 62.6%
April job gain reduced from 160K to 123K.
March job gain cut from 208K to 186K.
The headline number (unemployment rate drops to 4.7%) looks great but is due to 664K people leaving the job force. Looking closer the numbers are not good. This lowers the probability the Fed will raise rates in two weeks. On the news, index futures dropped (S&P went from flat to being down 8). The dollar immediately fell an entire buck. Gold and silver jumped, but oil rallied and then gave everything back.
Once things settle down after today’s open, we’ll get two weeks of nonstop Fed talk.
The S&P is within 35 points of its all-time high (ALL-TIME), and there are many who don’t think the market can absorb a slightly higher rate. Actually, when considering dividends, the S&P is ready at an all-time high.
But what do I know? The Fed is permanently “accomodative. It’s more important to keep the stock market propped up than to allow savers to earn a little interest on the money they have in the bank.
My bias remains to the upside, but I’m not exactly thrilled about the prospects of having two weeks of slow action leading up to the FOMC meeting. More after the open.
Stock headlines from barchart.com…
Monsanto (MON -0.56%) climbed nearly 1% in pre-market trading after people familiar with the matter said Bayer AG has secured about $63 billion in financing from five banks for its proposed acquistion of the company.
Rambus (RMBS -0.08%) was rated a new ‘Buy’ at Wunderlich with a 12-month price target of $15.
WebMD Health Corp. (WBMD -0.30%) was downgraded to ‘Market Perform’ from ‘Outperform’ at William Blai & Co.
Cooper Cos. (COO +1.08%) gained almost 5% in after-hours trading after it reported Q2 adjusted EPS of $2.05, better than consensus of $1.92, and then rasied guidance on fiscal 2016 adjusted EPS to $8.20-$$8.50 from a prior view of $8.00-$8.30.
Five Below (FIVE +0.40%) rose +0.5% in after-hours trading after it reported Q1 adjusted EPS of 12 cents, higher than consensus of 10 cents.
Zumiez (ZUMZ +2.03%) slumped 9% in after-hours trading after it said May comparable same store sales were down -7.6% y/y, a bigger decline than estimates of -6.4% y/y, and then forecast a Q2 EPS loss of -9 cents to -13 cents, much weaker than consensus of a 5 cent gain.
The Gap (GPS +2.57%) climbed almost 5% in after-hours trading after it reported May comparable same store sales were down -6% y/y, better than estimates of -8% y/y.
Broadcom Ltd. (AVGO +0.09%) rose over 6% in after-hours trading after it reported Q1 adjusted EPS continuing operations of $2.53, higher than consensus of $2.38.
China Biologic Products (CBPO -2.50%) fell over 2% in after-hours trading after it announced a secondary offering of 2.8 million shares of common stock.
Yelp Inc. (YELP +1.26%) was rated a new ‘Buy’ at Maxim Group with a 12-month price target of $41.
Ambarella (AMBA +2.26%) jumped nearly 10% in pre-market trading after it reported Q1 adjusted EPS of 34 cents, better than consensus of 28 cents.
Bazaarvoice (BV +2.10%) rallied 9% in after-hours trading after it reported a Q4 adjusted loss of -1 cent, a smaller loss than consensus of -4 cents.
Thursday’s Key Earnings
Ambarella (NASDAQ:AMBA) +9.5% AH beating estimates, unveiling buyback.
Broadcom (NASDAQ:AVGO) +7.2% AH lifted by margin strength, cost controls.
Joy Global (NYSE:JOY) +22% following a big earnings surprise.
Today’s Economic Calendar
3:45 Fed’s Evans: U.S. Economic and Monetary Policy
8:30 Non-farm payrolls
8:30 International Trade
9:45 PMI Services Index
10:00 Factory Orders
10:00 ISM Non-Manufacturing Index
12:30 PM Fed’s Bralnard: U.S. Economic and Monetary Policy
1:00 PM Baker-Hughes Rig Count
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers