Market Report – April 9, 2012

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In The Rear View Mirror:

 It took just four trading days for the S&P 500 to slide 0.7% and notch its worst weekly performance of 2012. U.S. markets were closed Friday in observance of the Good Friday holiday. During Thursday’s trading session, the last one of the week, the Dow Jones Industrial Average and S&P 500 endured slight losses, but the Nasdaq closed higher.

Facebook is already influencing the market…and it’s not public yet!

It was nice that the Nasdaq closed higher, but almost the entire reason for that was Facebook announcing it would list on that exchange following its IPO next month. In other words, the Nasdaq probably would’ve joined the other two indexes in the red if not for Facebook and it’s highly likely enthusiasm for where shares of Facebook will trade will have waned by the time markets open on Monday.

We could lament how weekly jobless claims fell to a four-year low on Thursday or we could discuss what looked to be a somewhat encouraging ADP private sector payroll report the day before. Those numbers are of little consequence following the March non-farm payroll data released on Friday that showed the addition of just 120,000 new jobs last month. That concludes a three-month streak of 200,000 or more new jobs added and the March number was well below the 205,000 new jobs economists were expecting.

The Markets @ 4/5/2012
Index Close Weekly % Change YTD Change YTD%
DJIA 13060.14 -151.9 -1.15% 842.58 6.90%
NASDAQ 3080.5 -11.07 -0.36% 475.35 18.25%
S&P 500 1398.96 -9.51 -0.81% 141.36 11.24%
NYSE Comp 8081.35 -125.58 -1.53% 604.32 8.08%
NYSE Amex 2378.92 -27 -1.12% 100.58 4.41%
RUS 2000 818.18 -12.12 -1.46% 77.26 10.43%
VANG INTL 14.25 -0.37 -2.53% 1.19 9.11%
USX CHINA 4983.53 -10.36 -0.21% 453.73 10.02%
EMERG MKTS 6797.92 -41.91 -0.61% 792.61 13.20%

Market Report

Given the disappointing jobs report, maybe it was good thing that markets were closed in the U.S. on Friday. Unfortunately, there was an abbreviated 45-minute equity futures trading session that saw S&P 500 and Dow futures each slide 1.1%. By the time dust settled on the shortened futures session, S&P 500 futures were resting around 1,375. The index closed at 1,398 on Thursday. In other words, we could be heading for a nasty open come Monday morning.

The unemployment rate fell to 8.2% from 8.3% last month, but that’s of little comfort to the market because most of that decline can be attributed to folks giving up on looking for work and departing the workforce. For those keeping score at home, 164,000 folks threw in the towel on their job forces and are no longer considered part of the work force.

If there is any bright side to March jobs report it is the following:

Should the April jobs number, scheduled to be released on May 4, look like a sequel to what we saw for March, the chances for another round of quantitative easing by the Federal Reserve jump significantly. Hopefully, the market won’t need QE3; but hopefully the Fed will act if QE3 becomes a real necessity.

RED numbers are all over the place

The Dow lost 152 points this week to close at 13,060.14…still up 842.58 and +6.90% YTD.

The Nasdaq only gave back 11.07 points, which kept the YTD gains above 18% at 18.25%. The S&P 500 backed up slightly… down 9.51 points and 0.68% for the week and is still up an impressive 11.24% YTD.

The Russell 2000, was hit pretty hard by the week’s events and lost 1.46%…our small-cap benchmark is still showing over 10% gains YTD but we really hate to give back that much at one time.

The Internationals were the big loser this week…down 2.53% and closing with less that YTD gains over 10% for the first time in a good while.

China and the Emerging Markets both coughed up some gains too…losing 0.21% and 0.61% respectively, but hanging onto a 10% and 13% gain YTD…all in all, still very respectable.

When things go south…they can really go south in a hurry.

Slightly Mixed Results for the Third Week in a Row

Gold closed $40.80 lower this week; settling at $1,628.50.

The US dollar gained 0.0160, closing at 0.7655 Euros; the 10-year bond continued up… +$0.250 at $98.755, and the 30-year bond gained $0.188 to close the week at $96.188.

T. Boone Pickens: Oil Could Hit $148 a Barrel

WTI Crude Oil reversed its trend for the week…closing at $103.31; up $0.29…trending higher, but still not enough to hurt the economy. However, we read a disturbing comment by T. Boone Pickens, the Texas billionaire, who was asked by Larry Kudlow… “how much U.S. consumers could see prices rise?” T. Boone issued a dire proclamation.

“I don’t know how much is up” he said. “I think you can very well see the old high — $148.” (Editor’s note…July 2008, oil hit $145)

The Bottom Line for Stocks:

Things can change in a hurry in the financial markets and that is what happened in the span of a week. A week, it appeared as though stocks were still in decent shape. Following the March jobs report, a return to 1,350 for the S&P 500 could be in the cards.

Don’t think that’s possible? Think again.

First-quarter earnings season is about to kick into high-gear. Exclude Apple (Nasdaq: AAPL) and the S&P 500’s Q1 EPS is expected to show little to no growth. Marquee reports in the week ahead include Google (Nasdaq: GOOG), J.P. Morgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC).

Tread carefully for now.

Research and Editorial Staff
MicroCap MarkePlace