After a stunning end to last week with a US jobs report that surpassed everyone's forecasts, it's hard to remain gloomy as the strong start of 2012 has taken many investors and analysts by surprise.
Wall Street posted yet another week of gains. The Dow Jones Industrial Average rose 1.6 percent in the past five days. The Standard & Poor's 500 Index climbed 2.2 percent for the week.
That brought its gain for the year to 6.9 percent, the best annual start since 1987, according to Bloomberg.
American employers added 243,000 jobs in January, the most in nine months, and the unemployment rate fell to 8.3 percent from 8.5 percent in December, according to Labor Department data released on Friday. Those numbers were better than anyone expected and underpin recent signs that the world's largest economy by and large is recovering.
"The stars are aligning to push the market higher,” Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, told Bloomberg. The jobs data "was a very encouraging report. It should silence a lot of the skeptics out there who are saying that Europe is going to push the US into a recession."
Investors will watch Federal Reserve Chairman Ben Bernanke's testimony on the economy to the Senate Budget Committee on Tuesday for fresh clues. He'll also speak on Friday at the 2012 National Association of Homebuilders International Builders' Show on "Housing Markets in Transition."
Economic data on tap this week in the US include the Thomson Reuters/University of Michigan's consumer sentiment index and international trade figures.
Walt Disney and Cisco are among the slew of companies set to report their latest earnings. Through Friday, 283 companies in the S&P 500 have reported results, with 60 percent posting earnings that have topped Wall Street expectations, according to Reuters.
That's better than in Europe where, according to StarMine estimates, about 57 percent of the 275 companies that have reported so far have fallen short of their earnings forecasts.
Even so, Europe's Stoxx 600 Index posted a 3.6 percent climb for the week.
Other factors have helped boost sentiment such as the talks between Glencore and Xstrata about an US$80 billion merger. The agreement is set to be announced this week, potentially Tuesday, when Xstrata is due to publish 2011 results, according to Reuters.
Investors will eye this week's meetings of monetary policy makers in Europe, Britain and Australia.
The European Central Bank will probably wait until its March meeting to drop its current record low key rate of 1.0 percent down to 0.75 percent, according to a Reuters poll, while the Bank of England is widely expected to boost the amount it is pumping into the struggling economy via asset purchases by 50 billion pounds (US$79 billion).
Meanwhile, Greece keeps on struggling to get the green light for its second financial bailout.
Euro-zone ministers postponed a meeting that had been scheduled for Monday, and aimed at finalising the Greek rescue, because of Greek reluctance to commit to reforms, according to Reuters.
The calendar for debt auctions in Europe in the coming days includes about 9 to 10 billion euros of new issuance from the Netherlands and Germany.
(BusinessDesk)
8 Comments
More employment, more jobs – the signs are positive in USA/ China.
Can the author in the future tell us in what sectors these jobs occur ? Are the jobs full time or just shared with others - again ?
As I mentioned a number of days ago adding jobs e.g. in the military sector or infrastructure – isn’t good news. I cannot see many new jobs in the real production sector – making real money.
here is the detail in the official report, in full
http://www.bls.gov/news.release/empsit.nr0.htm
follow the links at the bottom for even more detail.
Thank you David for that.
Interesting description. It clearly shows how careful we have to be commenting on so called - “Positive Job Creation".
In the goods-producing sector, manufacturing added 50,000 jobs. Nearly
all of the increase occurred in durable goods manufacturing, with job
growth in fabricated metal products (+11,000), machinery (+11,000),
and motor vehicles and parts (+8,000). Durable goods manufacturing has
added 418,000 jobs over the past 2 years.
I personally think many new jobs in many manufacturing countries will go to the rearmament sector and deceive about real productivity. The situation is just getting worse.
Skeptics familiar with the lying going on should go to these two articles:
http://globaleconomicanalysis.blogspot.co.nz/2012/02/nonfarm-payroll-243000-unemployment.html
I am not impressed. A blind man could see the lying going on here. The employment rate is falling, and we are supposed to believe that the economy is adding jobs? What a load of horse shit. Accounting gimmiks.
US 2007 income tax reciepts 7 trillion, 2011 income tax reciepts 6.2 trillion. Think about what that means re. GDP, Jobs, Consumers, Mortgages etc.
Labour force participation rate December 64%, January 63.7%. This is a measure of the total available population of working age, showing the percentage that has a job. The population is growing, and the percentage of the population that has a job, is falling.
Now stop talking lies, and propaganda. This is the opposite of a recovery.
Why is the media promoting this garbage? I can understand why the sheeple believe it.
For the real story behind the US unemployment figures see the link below. As far as the US Gov't statistics are concerned it's certainly "1984" propoganda time.
http://lewrockwell.com/rep3/fraudulent-employment-statistics.html
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