Wednesday, May 6, 2009

The Kirk Report

The Kirk Report

Stress Test Leaks

Posted: 06 May 2009 11:52 AM PDT

Better Than Expected Jobs Data

Posted: 06 May 2009 06:00 AM PDT

Good morning. Premarket futures have been volatile but point to a higher open.

This morning the market seems very encouraged by the preliminary employment data. According to the ADP, private sector employment fell by 491,000 in April vs. 708,000 in March (revised from 742K) which is much less than the 645,000 decline economists expected. Improvement was relatively widespread in the economy. Also, according to Challenger the pace of layoffs slowed in April but also remain at recessionary levels.

In other news, Bank Of America's capital shortfall is around $34 billion, Boston Globe reached a deal with its union, mortgage applications rose 2% from a week ago, 22% of homeowners are now underwater on their mortgages, and General Motors detailed plans to wipe out its current shareholders.

Premarket gainers: APAC, LINC, SUMT, ACOR, CROX, TRLG, AMMD, BORL, WIRE, CTIC, PNX, GERN, AFAM, VCLK, BRCD, FMCN, MPEL, ARM, DM, EGLE, DAN, AHD, VOLC, MPEL, CRXL, GOLD, BIDZ, APWR, DRYS, BEE, PLT, HMY, & EBHI.

Premarket losers: ACAS, GRMN, RACK, GM, ALY, GTU, TRMA, MIC, FRP, FWLT, CT, ATML, ATRC, ERTS, BBND, SKH, CLH, POWL, SGY, MNKD, ALGT, DENN, BAC, HRS, BCS, LVS, PBI, DOW, CPT, MT, & DHI.

At 10:30AM we have the weekly EIA Petro Report and more speeches by Fed's Gary Stern and Janet Yellen.

The general theme this week is that the economy is turning around quicker than expected which is the message we're hearing from Bernanke to just about everyone else. And, we're seeing the growing amount of confidence showing up in how the market continues to act, defying anyone who has been fading into the strength since April 20th. No doubt, we will get a sizeable correction at some point, but timing as always is the difficult part. As I've said before, I continue to look forward to the test of January's closing high in the S&P at 934 we're certainly not far from that level. Good news on the employment front is likely to cause anyone still skeptical or short to throw in the towel.

Go make it a great hump day!

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