04Mar2015 Pre-Market Open Commentary: Pointing Towards a Weak Open

Here is the European Market Open from CNN Money

European markets are mixed today. The CAC 40 is up 0.50% while the DAX gains 0.21%. The FTSE 100 is off 0.11%.

February 2015 ADP Job Growth at 212,000 – A Good Report Essentially the Same as Last Month

Written by Steven Hansen

ADP reported non-farm private jobs growth at 212,000. This should be again be considered a strong report even though it is seemingly weaker than the previous reports. The rolling averages of year-over-year jobs growth has improved after being static for the previous half year.

Read more …

ADP Employment Drops, Misses; Zandi Admits “Jobs Growth Slowing”

Another day, another missed data point. ADP Employment data shows 212k jobs added in February, which modestly missed expectations of 219k and is the weakest monthly gain in 6 months. Despite the miss, that showed large businesses adding by far the fewest jobs, Mark Zandi – in all his wisdom – remains optimistic: “jobs growth is strong but slowing,” and expects the economy “will return to full employment by mid-2016.”

Another miss…

Zandi explains:

“While February’s job gains came in slightly lower than recent months, the trend of solid growth above 200,000 jobs per month continued,” said Carlos Rodriguez, president and chief executive officer of ADP. “What is also encouraging is that job gains are broad-based across all key industries.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth is strong, but slowing from the torrid pace of recent months. Job gains remain broad-based, although the collapse in oil prices has begun to weigh on energy-related employment. At the current pace of growth, the economy will return to full employment by mid-2016.”

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The 90% data miss rate since Feb continues…

Greece Said To Tap Social Security Capital To Fund T-Bill Rollover

As reported over the past two days, in order to fund the payment on various imminent debt maturities to the IMF, the cash-strapped Greek government has been forced to consider, among other things, raiding Greek pension to procure the required funds. We noted yesterday, citing Reuters, that Greece will use short-term repo transactions to transfer the cash, but one government official said they could not be used to repay the IMF.

Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday…. At least part of the state’s cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the country’s debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters

“Repo” because the implication is that this funding need is temporary. Of course, should it provde to be anything but, the local population will promptly exhibit very angry tendencies once it is revealed that the “radical left” government plundered Greek pensions to pay the IMF which could then immediately turn around and use the fund to pay the Kiev government, which in turn could pay Putin to keep the gas running. Where Greece will find an additional source of funds to replace this Pension “repo” was not quite clear as of this writing.

Which brings us to the Greek T-Bill rollover auction this morning: an auction which as DB’s Jim Reid summarized is one of the two main events of the day, as follows:

This is Going to Push the US into Recession and Crush Stocks

February was a great month for stocks because of:

1) Rampant stock buybacks by corporations

2) Performance gaming by investment funds that were in damage control after one of the worst years (only 20% of them beat the market in 2014) and worst months (CRAP) in recent history.

3) Stocks are propped up by endless Central Bank intervention (we’re now at 20 interest rate cuts and counting).

Desperate times call for desperate measures. Despite the clear manipulation generating a 6+% ramp job in stocks in a single month, the US Dollar continues to CRUSH them year to date.

This is actually par for the course. The US Dollar actually produced the SAME return as stocks last year. You could have avoided all of the volatility of the stock market and seen the same return just sitting in cash.

And this is despite the Fed spending over $650 billion that year propping stocks up, not to mention the constant verbal interventions by Fed officials every time stocks began to collapse.

Interestingly enough, it is the US Dollar that will likely cause the stock market to crash. Stocks today are priced for economic perfection… at the very time that the US Dollar rally has imploded corporate profits and sales.

As Albert Edwards from Societe General recently noted, the recent collapse in profits is occurring at a pace usually associated with recessions

Frontrunning: March 4

RBS to cut up to 14,000 jobs in investment banking unit (FT)

Doctors, patients scramble ahead of high court Obamacare decision (Reuters)

Rajan Cuts India Rates After Modi Agrees to Inflation Target (BBG)

Russia’s Putin Makes First Public Comments on Killing of Boris Nemtsov (WSJ)

House breaks impasse, passes security funding without provisions (Reuters)

How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge (BBG)

Jeff Immelt’s Overhaul of GE Impeded by Falling Oil Prices (WSJ)

Sahara India Defaults on Luxury Hotel Loans From Bank of China (BBG)

Denmark Can’t Print Money Fast Enough (BBG)

Petrobras CEO Lost Job Over a $30 Billion Disagreement (

U.S. mortgage applications rise in latest week: MBA

NEW YORK (Reuters) – Applications for U.S. home mortgages edged up last week as interest rates dipped, an industry group said on Wednesday.

Target to cut thousands of jobs as seeks to cut costs by $2 billion

(Reuters) – U.S. retailer Target Corp , which has been battling back after a massive data breach and sluggish performance, on Tuesday said it will eliminate several thousand jobs, mainly from headquarters locations in the United States and India, as it aims to cut $2 billion in costs over two years.

Solicitor General Will Try, Again, to Keep Health Care Law Alive

As Donald B. Verrilli Jr. returns to the Supreme Court on Wednesday morning to defend the health law, he has reason to be nervous. His defense of the law in 2012 drew harsh reviews.

American Middle Class

Written by Frank Li

Talking about America’s middle class is both essential and fashionable today. So let me add my two cents worth with three clear messages:

1. America’s middle class, as we knew it in the 1990s, is gone for good.

   America’s middle class, as a whole, must prepare for a lower standard of living due to the rising living standards of the rest of the world in a global economy like ours.

   By pulling down the top 1%, all Americans will be worse off.

In Surprise Move, India Cuts Benchmark Interest Rates

It is the second such cut in two months by the Reserve Bank of India.

Baltic Dry Index Crashes: Calamity or False-Alarm?

Jeff Nielson for Sprott Money

For this commentary to make any sense to most readers, it’s necessary to address the two questions which immediately come to their minds: “what is the Baltic Dry Index?” and “why should I care about it?” Dealing with these questions in order; the Baltic Dry Index measures the prices paid to ship various forms of cargo, in the form of an index.

Answering the second question starts with further elaboration on the first. This price index is seen as a proxy for the demand for shipping, versus the capacity of the existing global fleet, because (in legitimate markets) price is always viewed as a proxy for demand. In turn; the demand for shipping is often viewed as a proxy for global economic activity (all other things being equal). Put bluntly; if economies are growing, then “things” are moving (by ship).

What conclusions, if any, should we then draw from the fact that the Baltic Dry Index has just crashed to a new, all-time low? In this case, analysis definitely starts with a picture.

The chart above does more than merely inform us that the most-recent measurement of 530 is an all-time low, it further enhances our …