Friday, February 05, 2010

Change in Nonfarm Payrolls Survey 15k Actual -20 Prior -85 Revised -150
Unemployment Rate Survey 10.0% Actual 9.7% Prior 10.0%
Change in Manufact. Payrolls Survey -20k Actual 11k Prior -27 Revised -23
Avg Hourly Earnings Survey 0.2% Actual 0.3% Prior 0.2%
Avg Weekly Hours Production Survey 33.2 Actual 33.3 Prior 33.2

Nonfarm Payrolls

Financial regulatory overhaul – British Finance Minister Darling says prefers global coordination - Darling
reiterated that breaking up banks and going it alone was not the way to fight the crisis, preferring global
coordination; Darling says he doesn’t think the proposed “Volcker” rules are the right way to go.

“Volcker Rules” may not survive skepticism in Congress; Dodd and Shelby have both made commentary
critical of the proposal Bloomberg

Democrats dangle tax cuts to win Republican support for jobs bill; The emerging plan on jobs is to
produce a package of tax cuts that could win Republican support. The core of the proposal would
include a tax credit for employers who hire new workers in 2010 and a package of tax extenders, such as
the research and development tax credit. The tax package would not include an estate tax provision –
The Hill.com

US Debt and Credit Rating – WSJ oped – the focus shouldn’t just be on balancing the budget; the key is
how. The best way would be to engineer economic growth, and the tax cuts being proposed aren’t the
way to go. WSJ

Fed – Hoenig says he dissented b/c of language – Hoenig said on Thurs that promising to keep rates low
for an “extended period” isn’t appropriate as the crisis fades. “I didn’t dissent on rates,” Hoenig said in a
speech in Oklahoma City, Oklahoma. “I dissented on the language.”

Larry Summers foresees improved eco outlook - “We’re not going to be out of the woods by any stretch,
but I suspect six months from now people are going to feel that this recovery is better established than
they do today,” Bloomberg
Total equity fund flows (excluding ETFs) saw outflows of $1.1 bn compared to $1.0 bn of outflows last
week. Domestic equity funds had $588 mm of outflows compared to $794 mm of outflows in the prior
week. International and Global equity funds lost $465 mm of assets compared to outflows of $240 mm
in the prior week. Worthington

Fundamental items weighing on stocks: 1) European sovereign concerns – the usual suspects seeing
their CDS costs widen in Europe (an index of the PIIGS CDS is at the highest level since back in Feb/Mar
’09). There are worries that an imminent Greek strike will imperil that country’s efforts to cut its
budget; a Spanish debt sale had to be cut; there is a political vote occuring in Portugal today that could
result in higher spending; etc. Also – the ECB press conf today failed to allay market concerns. 2)
economic worries – while the manufacturing economy has been very strong, this hasn’t translated into
the service sector (see yesterday’s non-manufacturing ISM) or to the jobs market (see today’s jobless
claims). Labor has been the one missing piece of the recovery story and many are wondering if/when it
will come. There are growing fears that tom’s BLS report will miss the St and show very large revisions;
3) US gov’t actions – two actions today (both crossed around 11amET) worried investors (the Cuomo
lawsuit against BoA and the Boxer/Webb bonus tax bill)