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Seeking Alpha

Thursday, March 06, 2014

WEDNESDAY'S MARKET: Premature Celebration & Why Smart Money Will Sell It

premature celebration
It seems investors are prematurely celebrating today, and it calls for the selling of stocks ahead of what I expect will be another bad jobs data point. Meanwhile, Russian troops persist on Ukrainian territory and tensions are rising between proud armed forces and peoples. Russia is pushing the issue, and I expect will find push back from the Ukraine. A surprise or two is surely in store for investors, because Vladimir Putin does not follow western rules. This will serve as a wake-up call to the so-called civilized world, that you can’t have global civilization when you live with wild animals.

U.S. Markets

Market ETF
March 6
YTD
Last 12
SPDR S&P 500 (NYSE: SPY)
+0.4%
+2.0%
+22.0%
SPDR Dow Jones (NYSE: DIA)
+0.5%
-0.8%
+14.9%
PowerShares (Nasdaq: QQQ)
+0.2%
+3.7%
+33.1%
SPDR Gold Shares (NYSE: GLD)
+0.6%
+11.7%
-15.4%
iShares US Real Estate (NYSE: IYR)
-0.5%
+9.1%
-0.3%
United States Oil (NYSE: USO)
+0.3%
+2.7%
+11.5%
PowerShares DB US$  Bullish (NYSE: UUP)
-0.5%
-0.7%
-5.0%
PIMCO Total Return ETF (NYSE: BOND)
-0.1%
+1.6%
-2.8%

Stocks are up Thursday as we head into the critical Employment Report set for Friday morning release. I think it’s a mistake, and would take bets off here. If markets rise on the report tomorrow, I would likewise take off risk after that news. The Ukrainian crisis is not going away, and a pending and dirty election in Crimea that will demand secession from the Ukraine will bring with it more trouble. The prideful Russians will accept nothing less than domination here, and I’m not sure they’ll get it without the shedding of blood, considering Ukrainian righteousness and western pride. That said, the employment report could be negatively impacted by the sample period, which fell on a cold snowy period. So, forget about holding stock into the weekend; why hold stock heading into Friday even?

International Markets

EUROPE
INTRA
ASIA/PACIFIC
CLOSE
Vanguard Europe (NYSE: VGK)
+1.0%
iShares Japan (NYSE: EWJ)
+1.7%
iShares U.K. (NYSE: EWU)
+0.2%
SPDR China (NYSE: GXC)
+0.8%
iShares France (NYSE: EWQ)
+1.5%
Asia Ex-Japan (NYSE: AAXJ)
+0.9%
iShares Germany (NYSE: EWG)
+0.9%
iShares S. Korea (NYSE: EWY)
+0.9%
Global X Greece (NYSE: GREK)
+1.0%
WisdomTree India (NYSE: EPI)
+2.0%

Global shares seem to be following the same macro-drivers across Asia and Europe this week. If you track the five-day charts of the VGK and the AAXJ you see it. The Ukrainian crisis is clearly playing a critical role in global share trading, with Monday producing a global selloff and Tuesday bringing recovery as events transpired in Eastern Europe. Yesterday we received information about economic growth in China that met with approval and today the ECB held rates steady while German factory orders offered a positive tone. I expect those who bought into today will regret it come Monday morning.

Economic Data

TODAY’S ECONOMIC REPORT SCHEDULE
Economic Data Point
Prior
Expected
Actual
THURSDAY



45,107

41,835
349K
338K
323K
Gallup US Payroll to Pop.
42.0

43.1
+3.5%
+2.4%
+1.8%
-Unit Labor Costs
-2.1%
-0.5%
-0.1%
Chain Store Sales



-28.6

-28.5
-2.0%
-0.5%
-0.7%
-95 Bcf

-152 Bcf










Economic data offered a mixed tone today, but stocks are likely higher thanks to employment data. Challenger’s Job-Cuts Report showed a lower level of announced corporate layoffs than the prior month. Weekly Jobless Claims fell significantly to a lower level, and was also under economists’ expectations. The fact that this data comes just ahead of the critical monthly Employment Situation Report gives it more weight, though I do not expect it to carry through and true to tomorrow’s data.

On the short side of the table, nonfarm productivity rose at a slower pace than last month and also missed economists’ expectations. Factory Orders slipped again in the latest period, keeping with the prior month’s trend of the same. Ending with an important positive note, Consumer Comfort improved slightly this week, after last week’s sharp gain.

Commodity Markets (10:35 ET)

WTI Crude
-0.0%
Brent Crude
+0.1%
NYMEX Natural Gas
+2.6%
RBOB Gasoline
-1.5%
Gold Spot
+0.6%
COMEX Silver
+0.5%
COMEX Copper
+0.3%
CBOT Corn
+1.2%
CBOT Wheat
+0.2%
CBOT Soybeans
+1.0%
ICE Cocoa
-0.4%
ICE Sugar
+1.1%
ICE Orange Juice Conc.
+0.5%
CME Lumber
+0.1%
CME Live Cattle
-0.4%

Natural gas gained sharply on the latest inventory data, which showed a revival of the big draw. It has been cold again, so this should have been predictable, especially for regulars in this space. Otherwise, energy is not sure what to do on the bizarre day-to-day twists around the Crimean situation. Gold and silver are higher today, though, which is a position I continue to support this year.

Stock Activity

We have important reports from Costco (Nasdaq: COST), Joy Global (NYSE: JOY) and Kroger (NYSE: KR) today mixed in with an interesting list.

EPS REPORTS
Company
Ticker
THURSDAY

21Vianet
Nasdaq: VNET
Alamo Group
NYSE: ALG
Alaska Communications
Nasdaq: ALSK
Alexza Pharmaceuticals
Nasdaq: ALXA
Alon USA Energy
NYSE: ALJ
Ambarella
Nasdaq: AMBA
Analogic
Nasdaq: ALOG
Arabian American Development
Nasdaq: ARSD
Baxano Surgical
Nasdaq: BAXS
Benefitfocus
Nasdaq: BNFT
Biospecifics Technologies
Nasdaq: BSTC
Blackrock Kelso Capital
Nasdaq: BKCC
BPZ Resources
NYSE: BPZ
CECO Environmental
Nasdaq: CECE
Checkpoint Systems
NYSE: CKP
Chembio Diagnostics
Nasdaq: CEMI
Chesapeake Utilities
NYSE: CPK
Children’s Place Retail Stores
Nasdaq: PLCE
Ciena
Nasdaq: CIEN
Comtech Telecommunications
Nasdaq: CMTL
Cooper Cos.
NYSE: COO
Costco
Nasdaq: COST
CPI Aerostructures
NYSE: CVU
Craft Brew Alliance
Nasdaq: BREW
CST Brands
NYSE: CST
CTC Media
Nasdaq: CTCM
Descartes Systems Group
Nasdaq: DSGX
Dot Hill Systems
Nasdaq: HILL
Emergent BioSolutions
NYSE: EBS
Finisar
Nasdaq: FNSR
Five Star Quality Care
NYSE: FVE
FLY Leasing
NYSE: FLY
Fresh Market
NYSE: TFM
FXCM
Nasdaq: FXCM
Glowpoint
Nasdaq: GLOW
H&R Block
NYSE: HRB
IDT
NYSE: IDT
Information Services Group
NYSE: III
Jamba
Nasdaq: JMBA
Joy Global
NYSE: JOY
Korn/Ferry
NYSE: KFY
Kroger
NYSE: KR
Lehigh Gas Partners
NYSE: LGP
LRR Energy
NYSE: LRE
Microvision
Nasdaq: MVIS
Nature’s Sunshine Products
Nasdaq: NATR
Navidea Biopharmaceuticals
Nasdaq: NAVB
Neonode
Nasdaq: NEON
NGP Capital Resources
Nasdaq: NGPC
Novatel Wireless
Nasdaq: NVTL
Perficient
Nasdaq: PRFT
Pinnacle Foods
NYSE: PF
Qihoo 360 Technology
Nasdaq: QIHU
Quanex Building Products
NYSE: NX
Quiksilver
NYSE: ZQK
Repligen
Nasdaq: RGEN
Safeguard Scientifics
NYSE: SFE
Sanchez Energy
NYSE: SN
Skullcandy
Nasdaq: SKUL
Spectrum Pharmaceuticals
Nasdaq: SPPI
Stage Stores
NYSE: SSI
Staples
Nasdaq: SPLS
Stoneridge
NYSE: SRI
Sunesis Pharmaceuticals
Nasdaq: SNSS
Synergetics USA
Nasdaq: SURG
Thor Industries
NYSE: THO
Trans World Entertainment
Nasdaq: TWMC
U.S. Physical Therapy
Nasdaq: USPH
U.S. Auto Parts Network
Nasdaq: PRTS
U.S. Concrete
Nasdaq: USCR
Verastem
Nasdaq: VSTM
Vermillion
Nasdaq: VRML
VimpelCom
NYSE: VIP
Violin Memory
Nasdaq: VMEM
W&T Offshore
NYSE: WTI
Warren Resources
Nasdaq: WRES
Winthrop Realty Trust
NYSE: FUR
Zalicus
Nasdaq: ZLCS

TODAY’S MOST ACTIVE STOCKS
BIGGEST GAINERS
% Gain
Digital Power (NYSE: DPW)
+74%
Pixelworks (Nasdaq: PXLW)
+43%
Energy Recovery (Nasdaq: ERII)
+38%
Infosonics (Nasdaq: IFON)
+26%
Agios Pharmaceutical (Nasdaq: AGIO)
+22%
Karyopharm Therpeutics (Nasdaq: KPTI)
+22%
China New Borun (Nasdaq: BORN)
+24%
China Precision Steel (Nasdaq: CPSL)
+24%
Sangamo Biosciences (Nasdaq: SGMO)
+20%
Ikonics (Nasdaq: IKNX)
+19%
BIGGEST LOSERS
% Drop
TrovaGene (Nasdaq: TROVU)
-41%
XG Technology (Nasdaq: XGTIW)
-37%
NV5 Holdings (Nasdaq: NVEEW)
-22%
Northwest Biotherapeutics (Nasdaq: NWBOW)
-22%
Spark Networks (NYSE: LOV)
-22%
xG Technology (Nasdaq: XGTI)
-21%
EveryWare Global (Nasdaq: EVRY)
-20%
Dot Hill Systems (Nasdaq: HILL)
-16%
Staples (Nasdaq: SPLS)
-15%
Cross Country Health (Nasdaq: CCRN)
-15%

Other Reports of Interest:
How a War-Driven Flight to Quality Could Lift Annaly Shares (NYSE: NLY)

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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