The Kirk Report

Pre Jobs Report Trading

Good morning. Futures are lower amid dollar strength and mixed action in overseas markets. Unlike yesterday, we do have a lot of headlines to sort through especially concerning the employment picture.

• ADP jobs report came in better than expected (ADP)

• U.S. job cuts shrink to two-year low in December (Reuters)

• Consumer confidence improves (ABC News)

• U.S. retailers saw a strong finish to the 2009 holiday season (Reuters)

• US shopping center vacancies hit records (Reuters)

• Mortgage demand near six-month low as rates jump (Reuters)

• Bernanke faces mounting criticism after speech (The Hill)

• Senate panel nears agreement on role of Fed (Reuters)

• US slaps more duties on steel products from China (CNBC)

• China's Ministry of Housing says it plans to tighten credit policy to curb speculation in the real estate market (MarketNews)

• Greece rejects bailout speculation (Bloomberg)

• GMAC expects to post a $5 billion loss (Washington Post)

• Banking chief Dodd to leave Senate (Reuters)

At 10:AM we have the ISM Non-Manufacturing Survey and at 10:30 the EIA Petroleum Status report. Then this afternoon at 2:PM we have the FOMC minutes.

Read more of my premarket report.

We Begin 2K10

Good morning and happy new year!

Futures are positive amid strength in overseas markets, dollar weakness, and M&A activity. Also the Federal Reserve's top two officials hinted that interest rates would stay at ultra-low levels for months to come.

Top headlines this morning include the following:

• Low rates didn't cause bubble, Bernanke says (MarketWatch)

• Oil above $80 on US economy, demand optimism (Chron)

• U.S. business loan defaults rise again (Reuters)

• Chinese manufacturing grew the most in five years (BusinessWeek)

• Novartis seeks to buy rest of Alcon for $39 billion (Reuters)

• Total signs a $2.25B shale-gas pact with Chesapeake Energy (Reuters)

• Merz Pharma Group will acquire all the outstanding shares of BioForm Medical (Bioform)

• Analysts at both UBS and Credit Suisse upgraded shares of Morgan Stanley (MarketWatch)

At 10:AM we have reports on Construction Spending and the ISM Manufacturing Index. Also today Fedspeak is expected from both Lockhart and Duke during today's session.

Read more of my premarket report.

Futures Up On Dollar Drop

Good morning. Futures are positive as the dollar falls back and mixed performances were seen in overseas markets. Today's top headlines are:

• Japan's GDP disappoints (Bloomberg)

• Concerns over the finances of some of the world's governments (WSJ)

• Cost of insuring Dubai debt soars (CNBC)

• Americans grow more pessimistic on economy (Bloomberg)

• Double-digit unemployment seen for California until 2012 (CNBC)

• Mortgage applications hit two month high (CNBC)

• American homeowners will have lost nearly $500B in home value by year-end (Zillow)

• Guidance from Texas Instruments (Reuters)

• CIT could be out of bankruptcy within days (Reuters)

• TARP is credited with stopping an economic panic (Congressional Oversight Panel)

• Geithner said to be seeking TARP extension until next October (Bloomberg)

• Obama to meet Monday with bankers (WSJ)

• US Senator Shelby says deal on financial regulation rewrite unlikely this year (Smart Money)

• Obama presses for hiring incentives and small-business tax cut (Washington Post)

• Senators strike health deal (WSJ)

• Good times for Bill Gross (Bloomberg)

Like yesterday, we don't have much to look forward to on today's calendar. At 10:AM reports on Wholesale Trade and the Livingston Survey are due out. Then a half-hour later we have the weekly EIA Petroleum Inventories report.

Read more of my premarket report.

Stronger Dollar = Weak Equities

Good morning. Futures are negative and pointing to a lower open following weakness in overseas markets and strength in the U.S. dollar.

There's quite a bit of noise this morning and the top headlines are:

• FedEx shares gain on sunnier outlook (MarketWatch)

• A decline in comparable store sales at major retail chains (Econoday)

• TransUnion forecasts improvement in both mortgage and credit card delinquencies (TransUnion)

• Meredith Whitney says she believes the government is "out of bullets," and that the "sand could hit the fan" for banks in Q1. Also said the consumer is not improving and S&P will be under pressure (CNBC)

• According to Goldman Sachs, the S&P 500 to rally 13% through 2010 (Bloomberg)

• Manpower expects employers to begin hiring again next quarter (Bloomberg)

• Moody's put U.S. & the U.K on the ratings chopping block unless they reduce their debts (WSJ)

• Bernanke says U.S. economy is improving (Reuters)

• Citigroup and Wells Fargo are said to be in contentious talks with the government over how much capital they need to raise to exit TARP (WSJ)

• Democrats push more mortgage aid (Washington Post)

• Board to propose more flexible accounting rules for banks (New York Times)

• The UK announces one-off shock tax against banker bonuses (Guardian)

• After making threats, AIG executives will get their money after all (Bloomberg)

• SEC probing high-frequency strategies (Reuters)

• Lawmakers are reluctant to crack down on credit rating agencies (New York Times)

• More concerns over commercial debt (Reuters)

• Confidence in Dubai takes a hit after Moody's downgrade and rescue problems (Reuters)

• Japan unveils $81 billion economic stimulus (Reuters)

• China sees V-shaped recovery (Reuters)

There's not a lot on today's calendar except a report on job openings and labor turnover at 10:AM, a hearing on the foreclosure crisis, and President Obama will speak about the economy at 11:25AM.

Read more of my premarket report.

Jobs, Bernanke & The Dollar

Good morning. Futures are negative as following mixed performances in overseas markets and a stronger dollar fueled by interest rate fears.

News flow is relatively quiet as we start the new trading week, but some of the top stories include the following:

• Economists who foresaw payroll surprise now see job gains (Bloomberg)

• More than one-quarter of homeowners receiving help under a U.S. government foreclosure prevention plan are behind on their new mortgage payments (ABC News)

• Geithner says entire financial system was at risk at height of crisis (Bloomberg)

• Rock-bottom interest rates are luring banks into taking risky bets again (Reuters)

• The projected long-term cost of the TARP is now at least $200B less than previous estimates (Reuters)

• Mounting defaults on commercial property may keep regional lenders from repaying bailout funds until at least 2011 (Bloomberg)

• Dodd is ready to push through a controversial financial regulation reform bill with or without Republican support (Reuters)

• China's 8% economic growth goal achievable (China Daily)

• Dubai moved to ring-fence prized assets from the $26 billion debt restructuring of Dubai World (Reuters)

• Oil prices are not reflecting fundamentals according to the UAE (Reuters)

• Amazon.com says no plans to open physical stores (Reuters)

• Five high-ranking executives at AIG are prepared to quit if their compensation is cut significantly (WSJ)

At 10:AM we have the Employment Trends Index and then at 3:PM the Consumer Credit report. But, the focus of today will be on Ben Bernanke who is scheduled to give a speech to the Economic Club of Washington, D.C. at noon. Any hint from Ben regarding a change in interest rate policy following Friday's jobs report will be a major market mover although I suspect Bernanke will do his best not to rattle the markets, but be prepared nevertheless.

Read more of my premarket report.

Much Better Jobs Data

Good morning. Futures are very positive following the jobs report which showed only 11,000 jobs were lost and a 10% unemployment rate.

In other news, China hints at sticking to dollar despite worries, Obama promises immediate action to spur hiring, House Democrats want TARP money for jobs initiative, FDIC’s Bair may give banks reprieve from higher capital rules, the Treasury's refusal to sell its stake in Citigroup is hampering the bank's plans to repay TARP, the House votes to restore estate tax and VIX call trading jumps to record.

Read more of my premarket report.

Jobs, Retail Sales & More

Good morning. Futures are positive as the dollar drops and overseas markets rally especially in Tokyo as concerns over the strong yen eased, Euro area GDP was up +0.4% and the ECB left interest rates unchanged at 1% as expected.

That said, much of the positive premarket sentiment also seems directly related to news that Bank of America will replay $45 billion of its TARP loans spurring gains in the financial sector and chatter that tomorrow's jobs report will be surprisingly good due to year-on-year comparisons. For what it is worth, there was another drop in weekly jobless claims.

However not all of the news is positive including some disappointment over same-store sales from retailers, Fed officials warn of difficulty of timing stimulus exit, the U.N. sees slow 2010 global recovery and double-dip risk, a 1 point drop in the Monster Employment Index and a lower than expected Productivity and Costs report.

Read more of my premarket report.

December Begins

Good morning. Futures are positive following strength in overseas markets, a weaker dollar, and reduced fears over Dubai.

As Wall Street returns to work, there is a lot more news to work with today. Some of the many headlines include news that Dubai World is in talks on debt restructuring, a strong expansion in China's manufacturing, Cyber Monday sales appear strong, the latest read on weekly retail sales......Read more of my premarket report.

Dubai & Holiday Retail Sales

Good morning. Futures are slightly positive as Wall Street searches for direction on this final trading day of November. Much like on Friday, Dubai and holiday retail sales are in the spotlight and there are mixed reports on both. The dollar is also trading lower against a basket of foreign currencies and that has helped the premarket futures.

On the Dubai situation, according to WSJ, the United Arab Emirates central bank said Sunday it would make fresh funding available to local banks if needed, but didn't offer specific support to Dubai, raising worries of a rift between the struggling city-state and the U.A.E.'s federal government. Meanwhile, a Reuters article said that a government official from Dubai said that the Dubai government will not guarantee Dubai World's debts, such that creditors will be affected in the short term. This was in contrast to reports over the weekend the seemed to guarantee full government support.

As for the holiday shopping, traders are expecting to receive a lot more data today and throughout the week but the preliminary read is that while more shoppers hit stores, they spent less than last year. A number of retailers are out with their own perspectives including Amazon and eBay and we're going to hear much more in the week to come.

In other news, Bernanke fights against Fed reform, some failed banks are unwanted at any price, negative comments about AIG, 30 financial groups are on a systemic risk list, the Obama administration will push mortgage firms to reduce more loan payments, Democrats now expect healthcare overhaul to pass, an update on worldwide chip sales, a weak debut of Sands China and India's economy expands 7.9% in fiscal second quarter.

Premarket gainers: SIGA, VPRT, PDLI, AIXG, RTK, MITI, SEED, ALTH, BIIB, TRIT, APWR, FSLR, GENZ, SVA, NVAX, RINO, DEER, SIMG, NLST, VVUS, EMIF, STRA, HEAT, PMI, SKS & RMBS.

Premarket losers: CYNO, ERIC, GERN, VOD, ELS, AIG, UNL, RAX, EDZ, CEO, PTR, GOLD, TSTC, ADM, LYG, ING, RBS, BIDU & PFG.

On today's calendar we only a few regional reports including the 9:45 AM Chicago PMI, the 10:30AM Dallas Fed Manufacturing Outlook and the 12:PM Chicago Fed's Midwest Mfg. Index. However, the news that is likely to garner the most attention will be flowing out of the retail sector regarding Cyber Monday sales and expectations for the remainder of the shopping season based on preliminary data.

If you had the chance to review my daily notes, I added quite a few notes over the weekend including highlighting some key technical levels and divergences that indicate that we're approaching a critical crossroads in the market....

Read more of my premarket report.

Black Friday

Good morning. The bears are going to receive an early Christmas present courtesy of Dubai.

Futures are under the most significant pressure we've seen in some time on fears over Dubai's debt. Late Wednesday, Dubai World, the city-state's largest corporate entity, asked creditors for a six-month stay on repayment of $60 billion in debts. Asia and Europe markets sold off yesterday while the U.S. markets were closed for Thanksgiving.

As you might expect, top headlines focus on Dubai and its aftermath including a stronger U.S. dollar and a flight to safety toward treasuries. In other news, Democrats work on multibillion-dollar jobs package, rates on 30-year fixed-rate mortgage hit all-time low, Japan warns on soaring Yen and U.S. bank examiners faulted for poor oversight at failed lenders.

Read more of my premarket report.