NazDogs Stretch It To The Limit…Twice
June Nasdaq 100 futures
(
NDM1 |
Quote |
Chart |
News |
PowerRating) tumbled
through two limit-down trading-curb levels after the world’s number one maker of
semiconductors, Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) warned for the third straight quarter that it would miss earnings
expectations. Intel comprises a hefty 6% of the total weighting of the Nasdaq
100
(
NDX |
Quote |
Chart |
News |
PowerRating) index–although this weighting will be lower on Monday. Only five
Nasdaq 100 components finished in the green and none by more than a fraction,
demonstrating rampant liquidation in tech.
Stock index futures got no help from this morning’s jobs
report, which showed non-farm payrolls increased more than expected and wages
rose slightly last month. This indication of a tight labor market–unemployment remains
at 4.2%–and rising labor costs advances the argument that the Fed is less likely to cut
interest rates as aggressively to stimulate the economy as market participants
would like.
Many observers believe that the Fed needs to go
on the offensive and slash rates by as many as 75 basis points to jumpstart the
economy. Today’s report showed that job growth came in the service sector, while
manufacturing jobs continued to be cut back at a pace consistent with a manufacturing
recession. The question remains, will service sector jobs be able to grow
without a manufacturing base to support the services that underlie their growth.
For an analysis
of today’s jobs report and state of the economy, make sure to check out Tony
Crescenzi’s column. Tony is a top Greenspan and Federal Reserve follower and
ties-in the Fed’s likely response to the latest economic evidence from
today. He also makes the case that pessimism about the economy may be
excessive.Â
Naz futures closed 136.50 lower at 1838.00, a contract low. The June Spooz
(
SPM1 |
Quote |
Chart |
News |
PowerRating) also tanked to limit-down
levels and closed four handles off the low, down 35.00 1244.50. Dow futures
(
DJM1 |
Quote |
Chart |
News |
PowerRating) also plunged as Intel is a Dow component and cut 245.0 to settle at
10,705.0.
Interest rate futures dived on the jobs report. T-bonds
(
USM1 |
Quote |
Chart |
News |
PowerRating)
cascaded nearly a full point from their 105 29/32 high in the minutes immediately following the
report before settling down 7/32 at 105 13/32. 10-year notes
(
TYM1 |
Quote |
Chart |
News |
PowerRating)
closed 9/32 lower at 105 22/32.
European currency futures initially sank on the new economic
data and reduced-likelihood of aggressive Federal Reserve interest rate cuts.
But euro FX futures
(
ECH1 |
Quote |
Chart |
News |
PowerRating),
Swiss francs
(
SFH1 |
Quote |
Chart |
News |
PowerRating) and British pound
(
BPH1 |
Quote |
Chart |
News |
PowerRating) fought back to
manage marginal gains.Â
Momentum-5
List leader soybean oil
(
BOK1 |
Quote |
Chart |
News |
PowerRating) continues an interesting pattern
of hitting new highs on lap-up openings and selling off throughout the session.
The May contract closed .0700 lower at 16.3200.
Natural gas
(
NGJ1 |
Quote |
Chart |
News |
PowerRating)
gapped lower and plunged in its largest down-day in the past ten, closing at the
bottom of its range and on the neckline of a head and shoulders pattern. The
April contract closed .213 lower at 5.072.
Coffee
(
KCK1 |
Quote |
Chart |
News |
PowerRating)Â traded sharply lower for
a second day out of a Turtle Soup Plus One Sell setup, back to probe multi-year
lows, and finished 2.70 lower at 63.95.