Wake Up Call - Traders Give Their Take on Employment

Major U.S. equity indices appear set to open strongly higher today, as traders are interpreting Friday's employment situation report favorable for equities. While there is no question, strong employment implies a healthy economy, traders could have found concern in the number, and the possible pressure labor could apply to inflation. Therefore, some might worry that the Fed could find catalyst to raise interest rates. But, for now, good news is good news. Still, despite the near term strength we see, we think equities could face more obstacles as economic data portends to continue weakening. Oil prices are softening, as we forecast over the weekend and late last week. While there is good reason for gasoline to rise, we viewed the continued strength in oil illogical after the Iranian/U.K. sailor crisis was diffused and as economic health remained in question.

Asia:
Hang Seng Index NA; Shanghai/Shenzhen 300 +2.23%; NIKKEI 225 +1.48%; S&P/ASX 200 NA; Taiwan TAIEX +0.65%; BSE SENSEX 30 +2.5%; KRX 100 +0.99%; Ho Chi Minh +0.72%

U.K., Europe & Middle East:
DJ STOXX 50 Index NA; FTSE 100 NA; CAC 40 NA; DAX NA; Russian RTS Index +1.37%; Tel Aviv 25 NA; Tadawul All Share -0.8%; DFM General -0.22%


Key Headlines:

• *** Today, equity investors get their first chance to display their take on Friday's employment situation report. Asian markets rallied this morning on the news. It looks like good news is good news, at least at the open. In other words, the strong employment report looks to be viewed as reassuring on the health of the economy, rather than being seen as a catalyst for the Fed to act on inflation in the near term.
• *** Monday's earnings report schedule includes Delta & Pine Land (DLP), Laidlaw International (LI), Schnitzer Steel Industries, Inc. (SCHN), The Mosaic Company (MOS), Cascade Corporation (CAE) and more.
• *** The geopolitical focus is on Iraq and Iran again today. A huge anti-U.S. rally has been charged up by Moqtada al-Sadr today, as he may come out from cover to address the crowd. Meanwhile, Iranian President Mahmoud Ahmadinejad is to make an important nuclear announcement in a speech at the Natanz nuclear facility. Also, Iran declared today "National Nuclear Day," and as a result, some are speculating that Ahmadinejad will announce the completion of the nuclear fuel cycle at industrial scale production. tick tick tick, can you hear that? That's the clock on Israel's patience running down.
• *** Oil prices seem to be on a gradual slide, as Wall Street Greek theorized they would over the weekend and last week. As outlined above and in this week's "The Greek's Week Ahead - The Permabull May Charge."
• *** News broke today that Warren Buffet's Berkshire Hathaway has taken a leading (10.9%) interest in Burlington Northern Sante Fe Corp.
  
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