Yesterday was 'Jobs Thursday' and the rest of the economic news did not give us a great idea of where the economy is going as it was all mixed. Today is 'Jobs Friday' and we have another opportunity to have the jobs numbers set the tone going forward. Overnight we had China cut its interest rates in a surprise move, which has markets worried as the logical response to this is that the situation in China is worse than previously thought.
The economic news due out today would be the Nonfarm Payrolls (Consensus 100k), Nonfarm Private Payrolls (Consensus 105k), Unemployment Rate (Consensus 8.2%), Hourly Earnings (Consensus 0.2%) and Average Workweek (Consensus 34.4). From some articles and newsletters we have read as well as the what talking heads we have seen on television are saying investors need to watch for the whisper number of 125k on the jobs number. One should not be surprised if we move higher on bad numbers either as traders could trade on the belief that QE3 is not that far off.
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Looking at Asian markets we see markets are mostly lower:
All Ordinaries - down 0.26%
Shanghai Composite - up 1.01%
Nikkei 225 - down 0.65%
NZSE 50 - down 0.16%
Seoul Composite - down 0.92%
In Europe markets are lower:
CAC 40 - down 0.40%
DAX - down 0.41%
FTSE 100 - down 0.03%
OSE - UNCH
Technology
Apple (AAPL) continued marching higher on the news that it is developing an iPad Mini to be released this year. Shares moved up $10.53 (1.76%) to close at $609.94/share on volume of 17.2 million shares. The price action is picking up lately along with the volume, which is moving back up toward the 20 million share mark. We have been moving up dramatically in the past few days and are getting closer to the 52-week high much faster than we anticipated. If we can get some good news in the general market and economy paired with new product news out of Apple the 52-week high is not going to hold for very long. For now we shall continue with our thinking that shares will break that level, we will give further commentary on this as we approach that level.
Sirius XM (SIRI) rose another $0.05 (2.45%) to close at $2.09/share on volume of 52.1 million shares. Maybe we exited out of this a bit early yesterday, but profits were locked in and in the big picture the economic news yesterday was not all good, it was best described as mixed. For those looking for direction, we see the potential for another 5-8% rise here, but that is our short-term top. The company does have an earnings report at the end of the month and we suspect that there will be some interesting conversation regarding John Malone and the plans moving forward.
Biotechnology
Arena Pharmaceuticals (ARNA) had another good day yesterday after we highlighted it. Shares closed at $11.35/share after having risen $1.33 (13.27%) on volume of 42.1 million shares. We think that over the short term that this will be a good trading vehicle and that any time one can buy it around the $9-10/share range that one should. We still think that it is important that investors make themselves aware of the risks still involved as they have a tendency to creep up when least expected or wanted in this industry. We think that the big moves such as what happened over the past month are over until the actual sales start to roll in, but we still think that the 5-10% moves are possible.
Media
Shares in News Corp (NWSA) were down $0.29 (1.28%) yesterday to close at $22.44/share on volume of 15.1 million shares. A lot has been said regarding its proposed breakup, and we would just like to say that we like the breakup story. It is our opinion however that this breakup will not be as successful as the one Sumner Redstone did because half of this company will be print focused and both companies are not going to be television and film entities. That is the side of the deal you want to be on as television content is proving to be quite valuable.
Oil
Rosetta Resources (ROSE) was hit hard when oil headed lower and the energy sector was taken out to the woodshed. Since then the shares have recovered and volume has exploded since the news that the company would be added to the S&P 400 Mid-Cap Index. Shares now trade at $39.41/share as shares rose $0.09 (0.23%) yesterday. Volume was 11 times higher than the three-month average as 11.5 million shares traded hands. We think that this one gets back up to the $50/share level as oil prices move higher and the company continues to add production in the Eagle Ford Shale. This is also a potential takeover target with its wet assets in the Eagle Ford.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
