Federal budget, deficit and consumer credit, sentiment on tap
The Facebook IPO and buoyant jobs report is so last week. This week, we turn our attention to the federal government. You might have noticed it's the political season, so no doubt politicians of all stripes will harp on the nation's ballooning debt ($15.3 trillion or $48,900 per person), the annual deficit (likely to top $1 trillion again) and the international trade balance, which has posted a deficit almost continuously since the 1980s.
Since it will be a slow week, expect to hear a lot about the "Super Bowl Indicator." History says if an "original" National Football League team wins the Super Bowl, stocks will rise that year. Alternately, it drops if the winning team joined the NFL after the merger with the American Football League in 1970. Evidently, the Super Bowl indicator has a pretty impressive 80 percent accuracy rate. But keep in mind this quirky indicator failed miserably in 2008. The Dow lost 33 percent even though the Giants, an "original" team, beat the Patriots 17 to 14. Those of us in New York are willing to take the risk!
It was fitting that Madonna was scheduled to perform at the Super Bowl halftime show, since she was in her heyday when U.S. stocks last enjoyed such a strong start to the year - 1987 for the S&P 500 and 1991 for the Dow. For those of who remember, it was always about the 1983 for the Material Girl, when Borderline and Lucky Star blared through every dorm. (Admit it -- you liked her too!)
-- DJIA: 12,862, up 1.6% on week, up 5.3% on year (Highest close since May 19, 2008)
-- S&P 500: 1,344, up 2.1% on week, up 6.9% on year (Highest close since July 22, 2011)
-- NASDAQ: 2,905, up 3.1% on week, up 11.5% on year (Highest close since December 12, 2000, up 19% in the past 10 weeks)
-- March Crude Oil: $97.84, down 1.7% on week
-- April Gold: $1,740.30, up .3% on the week (up 5 consecutive weeks)
- AAA National Average Price for Gallon of Regular Gas: $3.47
FACTOIDS OF THE WEEK: January Jobs: Finally, a good report
-- Jobs Created: +243,000 (November and December revised up by 60,000; average monthly jobs gained in 2011 was 133,000)
-- Private sector jobs created: +257,000
-- Government: -14,000 (276,000 jobs lost over last 12 months)
-- Unemployment rate: 8.3% (lowest rate since February 2009)
-- Under-employment rate (marginally-attached, part-time): 15.1% (in 2007, the rate was 8%)
-- Total number of unemployed: 12.8 million (from 13.1 million)
-- Long-term unemployed (jobless for 27 weeks and over): 5.5 million, 43% of total unemployed
-- Average duration of unemployment: 40.1 weeks (down from 40.9, the highest on record)
-- Average workweek: 34.5 (unchanged)
-- Average hourly earnings: up $0.04 to $23.29 (over past 12 months, earnings up 1.9 percent)
THE WEEK AHEAD:
Mon 2/6:
Hasbro, Yum Brands
Tues 2/7:
Coca-Cola, Walt Disney
NFIB Small Business Survey
10:00 Job Openings and Labor Turnover (JOLTS)
10:00 Bernanke testifies on the economy to the Senate Budget Committee
3:00 Consumer credit
Weds 2/8:
Cisco Systems, CVS Caremark, Ingersoll-Rand, Moody's, News Corp, Ralph Lauren, Time Warner, Visa
7:00 Weekly mortgage apps
Thurs 2/9:
LinkedIn, PepsiCo, Philip Morris
8:30 Weekly claims
10:00 Wholesale inventories
Fri 2/10:
8:30 U.S. trade deficit
9:55 Reuters/UMich consumer sentiment (preliminary)
2:00 Federal budget
