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Markets Sense False Spring: Dave's Daily

Stocks in this article: AAPL XBI IBB XLY XRT MUB EZU UUP

Out the window today in New England were some robins. You generally wouldn't see them this far north until later in March. But there they were and must be confused. Stock markets appear confused as well by what should be a good employment report. But there's some seasonality to the 200,000 new jobs added and lower 8.5% unemployment rate. New jobs are always added during the holidays. Morgan Stanley stated that perhaps 50,000 of these new jobs were exclusively due to holiday staffing needs. If so, we'll see worse numbers in reports in the coming weeks with Jobless Claims and February's data.

Stocks were lower overall even as tech continued as a safe haven led by the usual suspects like Apple (AAPL) but also biotech's (IBB and XBI).

Meanwhile the eurozone continues to weigh on U.S. markets. The euro was weaker once again at ¿127.2 which affected gold slightly to the downside. Remember, the previous trend has been a weak dollar and strong U.S. stocks. The relationship makes for better exports and higher earnings for multinationals like McDonalds (MCD). Bonds were stronger once again, oil and commodities overall were mixed.

Trial balloon rumors from yesterday regarding a mortgage fix from the Obama administration seemed to fade and so did financials Friday. Along these lines Fed Governor Dudley wants more housing stimulus while Boston Fed President Rosengren has recommended the Fed buy more mortgage-backed securities. It's strange since with mortgage rates already below 4% they've had minimal effect on stimulating home prices. This may be due to the difficulty in qualifying for a mortgage these days, excess inventory and, strangely perhaps the Fed telling would-be buyers they can wait since rates will stay low forever.

For the S&P Index we continue to be just shy of the October high (1285.09) from which a more substantial rally could take place. Close but no cigar is the mantra here.

What is interesting about global stock markets is a more serious break from previous high global market correlations that were previously the norm. Obviously the eurozone has a lot to do with this and conditions there remain in a "wax on, wax off" condition.

Volume remains pathetically low and breadth Friday was negative to mixed for the NASDAQ.

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SPY - The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
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IWM - The iShares Russell 2000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the small capitalization sector of the U.S. equity market as represented by the Russell 2000 Index. The index represents the approximately 2,000 smallest companies in the Russell 3000 Index.
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QQQ - is an exchange-traded fund based on the Nasdaq-100 Index ®. The Fund will, under most circumstances, consists of all of stocks in the Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The portfolio is rebalanced quarterly and reconstituted annually.

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