Ahead Of The Vote

Good morning. Continuing the trend of negative reports on the economy, a larger than expected 159,000 jobs were lost last month with an unemployment rate staying at 6.1%. Oddly enough, premarket futures did not fall on the news as Wall Street is thrilled to see that Well Fargo is buying Wachovia in a stock-for-stock transaction. In premarket trading, a number of financial stocks are in rally mode as traders think a M&A wave is about to hit the sector once the bailout bill gets passed.

Meanwhile, as a sign that the credit crisis if far from over, yesterday Governor Arnold Schwarzenegger warned Hank Paulson that the state of California might need an emergency loan of as much as $7 billion from the federal government within weeks to stay afloat.

Premarket gainers: WB, PMI, NCC, GGP, ABK, SOV, AIB, LYG, HIG, FITB, MTRX, CPST, RF, SPAR, AIG, BCS, HUN, YGE, SFI, VSE, BZH, CS, EP, TMA, EP, GPN, SQNM, DB, S, RTP, & LINE

Premarket losers: MGA, PENN, LWSN, MRVC, C, ASMI, FMCN, STLD, ADBE, OVTI, IBN, ALU, & AEG.

Just like Monday, today the market's focus will be on Washington ahead of the bailout vote. It appears that some lawmakers have changed their opinion and will pass the bill, but as we've seen, you just never know until the vote comes in at 12:30PM. Before the vote, we have the ISM non-manufacturing survey which is likely to be as negative as the other economic reports we've seen this week.

Given this week's trading, we definitely have a trading range developing with this week's low and highs and a breakout either way (especially on the upside) could generate a counter-trend rally. We'll see how it plays out both ahead and after the vote. Ideally, we want to see the market rally upon bad news and this morning's nonchalant reaction to the jobs report is noteworthy. Premarket futures currently indicate a positive start and even gained upside traction after the jobs data was released.

Have a great Friday!