Friday March 10 Daily Market Primer

•          Happy Friday
•          Happy Birthday to my favorite 8 year old
•          February jobs = 235K, unemployment = 4.7%
•          Futures up

Happy Jobs Friday. Stocks barely budged on no market moving news from the Trump administration or the Fed ahead of today's jobs report.   Treasuries continued to sell off.  Health care shares came back a bit yesterday after the Trump Tweet induced downdraft on Wednesday.  But that was yesterday, and today, February non-farm payrolls are out at 235K jobs created, and January was revised up to 238K, beating the 200K Bloomberg consensus expectation and consistent with Wednesday’s strong ADP payrolls number.  It’s all systems go for a March rate hike.

So much for OPECs highly praised supply deal to bring stability and higher prices to the market, as oil let go over the last few days and is now trading at last November's levels.  This demonstrates that OPEC can influence, but not longer control, world oil prices. WTI is up a little this morning but trading below psychologically important $50 level, and the European benchmark, Brent crude, is at $52.50.   World stock markets are up everywhere except China, and US equity futures are indicating a strong reaction to the good jobs number.

	LAST	CHANGE	% CHANGE
DJIA	20,858.19	2.46	0.01%
Nasdaq	5,838.81	1.26	0.02%
S&P 500	2,364.87	1.89	0.08%
Russell 2000	1,360.12	-5.92	-0.43%
Global Dow	2,664.88	8.52	0.32%
Stoxx Europe 600	373.71	-1.52	-0.41%
Nikkei 225	19,604.61	286.03	1.48%
UK: FTSE 100	7,350.01	35.05	0.48%
CBOE Volatility	11.93	0.07	0.59%
Australia: S&P/ASX 200	5,775.60	34.40	0.60%
China: Shanghai Composite	3,212.76	-3.99	-0.12%
Hong Kong: Hang Seng	23,568.67	67.11	0.29%
Europe Dow	1,631.77	23.47	0.06%
India: S&P BSE Sensex	28,946.23	17.10	1.46%
France: CAC 40	5,013.84	32.33	0.65%
Germany: DAX	12,061.68	83.29	0.70%
Italy: FTSE MIB	19,777.38	206.14	1.05%
Spain: IBEX 35	10,067.30	68.90	0.69%
U.S. 3 Month	0.734	0/32
U.S. 2 Year	1.372	1/32
U.S. 5 Year	2.123	2/32
U.S. 10 Year	2.601	2/32
U.S. 30 Year	3.183	5/32
Germany 2 Year	-0.855	-1/32
Germany 10 Year	0.445	-5/32
Crude Oil	49.62	0.34	0.69%
Brent Crude	52.49	0.3	0.57%
Natural Gas	3.075	0.029	0.95%
S&P GSCI	383.03	1.62	0.42%
E-mini S&P 500	2372	8.75	0.37%

You've gotta love eight year olds, especially when they are an eight year old bull equity market which helped pull us out of the great recession of 2008 and resulted in a cumulative S&P return of 314%.     Here's a chart that tells the story. best performing index on this chart is the S&P midcap index, up 365%.

Bill Gross was on TV this morning reiterating his call that we’ve crossed the threshold for a bond bear market.  It’s official – South Korea’s President Park Geun-hye is impeached, and a number of top businessmen, including the heir apparent to the Samsung conglomerate, are in trouble in the influence peddling scandal that has engulfed the country.

Here’s the news:

Jobs day

At 7:30 a.m. Eastern Time the Bureau of Labor statistics will release payrolls data for February. After job gains of 227,000 in January, economists surveyed by Bloomberg expect the U.S. economy to have added 200,000 positions last month, with annual hourly earnings growth increasing by 2.8 percent. Both ADP and initial jobless claims data released this week have bolstered the case for a Federal Reserve rate hike next week, so only a gigantic surprise today would likely move the dial on those expectations.

Impeachment upheld

President Park Geun-hye of South Korea saw her parliament's impeachment upheld by the country's highest court, opening the door for her to face jail time amid a corruption probe. The graft investigation, which has also snared Samsung Electronics Co. heir-apparent Jay Y. Lee, is the largest scandal in the nation in decades. Shares on Seoul's Kospi index, which have rallied since Park's impeachment in December, are likely to continue their gains if history is any guide.

Oil gets lively

The oil market, which had been range bound for the first few months of the year, is finally showing signs of life. Bulls may not appreciate the direction the commodity has moved, however. A barrel of West Texas Intermediate for April delivery was trading at $49.49 at 5:30 a.m. The drop in prices shows the OPEC deal to reduce production is facing a major test. As OPEC tries to reduce the glut in global supply, U.S. exports are set to grow “a lot more," according to oil trader Vitol Group BV.

Markets rise

Overnight, the MSCI Asia Pacific Index gained 0.4 percent, while Japan's Topix index added 1.2 percent as the yen declined for a fourth day. In Europe, the Stoxx 600 Index was 0.5 percent higher at 5:43 a.m. as energy shares reversed losses in previous sessions. U.S. futures were also rising as investors await jobs data.

Free trade

EU leaders are taking on President Donald Trump's 'America First' mantra by sending a clear signal that the 28-nation bloc will continue to promote free trade. This week's meetings in Brussels are more likely to be dominated by Brexit positioning than free-trade deals, as leaders start to lay out their positions on the coming negotiations. South Korea's president is out. In a decision that's "final and unchallengeable," South Korea's Constitutional Court has removed President Park Geun-hye from office as a result of her corruption scandal. Mnuchin asks Congress to raise the debt ceiling. Treasury Secretary Steven Mnuchin sent letters to congressional leaders on Thursday asking them to raise the debt ceiling by midnight on March 17 to prevent the Treasury from needing to take "extraordinary measures" for the federal government to keep paying its bills. Oil is stabilizing. West Texas Intermediate crude oil trades up at 0.3% at $49.61 a barrel. Friday's bid comes after the energy component lost almost 7% over the previous two sessions in response to Department of Energy data showing US inventories swelled to a record high. Bitcoin is unchanged ahead of the big SEC decision. The cryptocurrency holds at $1,200 a coin as traders await the US Securities and Exchange Commission's decision on whether it will approve at least one of the three proposed bitcoin-focused exchange-traded funds by the Saturday deadline. Because the deadline falls on a Saturday, the announcement could come as late as Monday. Jeff Sessions rattles the marijuana industry. "Marijuana is against federal law, and that applies in states where they may have repealed their own anti-marijuana laws," US Attorney General Jeff Sessions told conservative radio host Hugh Hewitt on Thursday. "And I'm not in favor of legalization of marijuana. I think it's a more dangerous drug than a lot of people realize." Facebook reaches a deal to stream soccer matches. Facebook, the Spanish-language broadcaster Univision, and Major League Soccer have reached an agreement in which Facebook will stream at least 22 regular-season matches, The Wall Street Journal reports. Stock markets around the world are higher. Japan's Nikkei (+1.5%) led the gains in Asia, and Spain's IBEX (+0.9%) sets the pace in Europe. The S&P 500 is on track to open higher by 0.4% near 2,375. Earnings reports trickle out. Vail Resorts will release its quarterly results ahead of the opening bell. US economic data is light. Aside from the jobs report and everything associated with it, traders will be watching the 1 p.m. ET release of the Baker Hughes rig count. A House Divided Republicans advanced legislation through two House committees yesterday as part of their goal to dismantle the Affordable Care Act, but signs of discord spread around the capital as conservative lawmakers warned that this version of the health-law overhaul won’t pass. On party-line votes, the committees on Energy and Commerce, and Ways and Means approved measures repealing major parts of the 2010 health law, with the goal of holding a floor vote later this month. But conservatives fired warning shots at Republican leaders in an open challenge to House Speaker Paul Ryan, who said Republicans could either line up behind the House bill or renege on their promise to repeal the law. Conservatives disputed that assessment in a rebellion that has proved to be more expansive than House leaders expected. Slippery Slope Global markets are once again fixating on the price of oil after U.S. crude fell below $50 a barrel for the first time this year, in the biggest two-day selloff since June. U.S. oil futures fell an additional 2% to $49.28 a barrel yesterday after tumbling 5.4% the day before. This week’s selloff, following data showing U.S. stockpiles have risen to record levels, abruptly halted what had been the calmest period for oil prices in more than two years. Now there are signs that another wave of volatility from the oil market could spill over into stocks, bonds and other markets. Brimming inventories also put pressure on OPEC and other producers to extend their historic agreement to cut output. Meanwhile, Shell is selling nearly all of its Canadian oil-sands developments in deals worth $7.25 billion.

The market is having second thoughts on reflation.

Foreigners souring on U.S. high-grade credit not unsettling UBS.

Mexico lays out faster Nafta deal timeline than U.S. signals.

Draghi's blurry guidance still lights the way to the ECB exit.

Digital era kills paper use; adult incontinence fuels growth.

G-20 poised to signal retreat from climate-change funding pledge.

How to become an international gold smuggler. U.S. Infrastructure Gets ‘D+’ Grade From Civil Engineers Assange: WikiLeaks Will Help Tech Firms Defend Against CIA Hacking South Korean President Park Geun-hye Removed From Office AmEx’s Lending Push Goes Beyond Cards Corporate Insiders Haven’t Been This Uninterested in Buying Stocks Since Ronald Reagan Was President

Good morning and happy Jobs Day! Earlier this year, it seemed plausible that a bad report could derail a March rate hike, but that really doesn't seem to be on the cards any more. So if you're just looking at the print through the lens of the Federal Reserve, then you're missing the bigger picture. Economists expect 200,000 new non-farm hires. But if job creation is anything like Wednesday's ADP report -- which came in at 298K -- it may suggest a lot more hiring capacity in the U.S. economy than many people would imagine. Keep an eye on the labor force participation rate, therefore. A key premise of President Trump's economic message is that the participation rate -- the measure of adults who are working or looking for jobs -- would be boosted by a pro-growth policy mix.

On a totally unrelated note, it's been an interesting week in financial markets. Read this piece from Luke Kawa and Sid Verma on how the reflation trade globally is fading. One thing I've had my eye on all week is the Global Macro Movers function on the Bloomberg Terminal, which gives a global snapshot of what's moving in all asset classes around the world. The chart below shows all the big movers from the market open last Sunday. As you can see, outside of a few splotches, it's a sea of red, with a lot of pain in government bonds and commodities. It's just a snapshot of market action over the course of a trading week, but the widespread nature of the selling is something to keep your eye on.

Source: Bloomberg, BI, WSJ, CFAI Fin. Newsbrief