The market appears directionless in early morning trading. However, given the May jobs report tomorrow and the increasing worry about the European situation; I would not be surprised to see another sell-off by the end of the day.
10 worries for Thursday's market:
- ADP job growth for May came in worse than expected with only 133,000 private sector jobs created. Economists were expecting 150,000 new private sector jobs in the report and report confirms job growth has decelerated in the Spring.
- Weekly job claims also came in worse than expected at 383,000 claims and the prior weekly report was revised up to 373,000. The four-week moving average for new claims, a measure of labor market trends, increased 3,750 to 374,500.
- U.S. first quarter GDP was revised down to 1.9% growth and this was before the latest challenges in Europe, can't wait to see second quarter growth and would not be surprised to see the domestic economy to dip below 1% in the third quarter.
- Joy Global (JOY) became the latest manufacturer to report better than expected earnings for the quarter but to issue disappointing guidance citing weakness in Europe and uncertain demand domestically.
- Fitch (Got to love credit ratings agencies, always ahead of the curve) just came out saying Greece leaving the Euro is "material and rising".
- Growth in the BRIC's is slowing rapidly. This explains the horrid action in the commodity stocks recently. The chart on iron ore producer Vale (VALE) is downright ugly for example.
- The IPO market sans Facebook (FB) was already having the slowest start to a year since 2007. Facebook's debacle has closed the pipeline completely for a moment.
- There is increasing chatter that Spain is getting closer and closer to needing a bailout of its own with the Europeans scrambling to figure out how the heck they would pay for a reckoning in Europe's fourth largest economy.
- Oil continues to fall. While nice for consumers, it is likely a good indicator that the economy is slowing significantly.
- Gold has proven no safe haven for investors looking to escape the volatility driven by Europe. The yellow metal is having its worst month in eleven years.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
