Eagle Eye Opener: ‘Goldilocks’ Number; Wall Street Guessed Wrong; Service Firms Grow
December Payrolls: A ‘Goldilocks’ Number for the Market (YahooFinance.com)
The December jobs report showed the economy added 155,000 jobs last month and the unemployment rate ticked up to 7.8%. According to various consensus estimates, economists were expecting between 150,000 to 160,000 jobs added and a 7.7% unemployment rate. “That might be the goldilocks number the market was looking for,” says David Lutz, head of ETF trading at Stifel Nicolaus. “In light of being in line with expectations, this was actually a really solid number and a really solid reaction for the market,” says Lutz. “So we’re watching gold right now. Gold is going to be a leading indicator, it’s still getting absolutely pummeled.”
Almost All of Wall Street Got 2012 Market Calls Wrong (Bloomberg)
From John Paulson’s call for a collapse in Europe to Morgan Stanley (MS)’s warning that U.S. stocks would decline, Wall Street got little right in its prognosis for the year just ended. “They paid too much attention to the fear du jour,” said Jeffrey Saut, the chief investment strategist at Raymond James & Associates in St. Petersburg, Fla. “They were worrying about a dysfunctional government in the U.S. They were worried about the euro quake and the implosion of Greece and Portugal. Instead of looking at what’s going on around them, they were letting these macro events cause fear to creep into the equation.”
U.S. Service Firms Grow by Most in 10 Months (YahooFinance.com)
U.S. service firms’ activity expanded in December by the most in nearly a year, driven by a jump in new orders and hiring. The Institute for Supply Management says its index of non-manufacturing activity rose to 56.1 in December from 54.7 in November. That’s the highest level since February and above the 12-month average of 54.7. Any reading above 50 indicates expansion. The report measures growth in industries that cover 90 percent of the work force, including retail, construction, health care and financial services.