FRIDAY 2/7/14; Monthly Jobs Report

Dollar/yen 102.11. The Nikkei pops +2.2% to 14462. Kubota increases machinery sales projections which indicate potential growth in the farming and construction industries. China markets reopen after the lunar new years holiday. The Shanghai moves up solidly from start to finish gaining +0.6% to 2045. Hang Seng is up +1%. Lenovo gains +1.5% after GOOG purchases a stake in the company. Surprisingly, Mark Mobius, with Templeton Emerging Markets Group, says the emerging market selloff may deepen moving forward. This is a shock since Mobius is a permabull and always places Asian and emerging markets in a positive light.

The Ukraine unrest continues. A call between US and European diplomats is intercepted and posted on YouTube. Russia may have posted the conversation to embarrass the US and Europe and to discourage the West’s reach into the Ukraine. Ukraine serves as a battlefield between the US and Russia.

The German Constitutional Court requests advice from the European Court of Justice (ECJ) concerning the legality of the ECB’s OMT program. The German Court was to rule on the constitutionality of the OMT last Fall but delayed the decision until March. The German Court has emphasized in the past that the OMT is likely unconstitutional but the ECB reiterates that the program does fall within their mandate (the ECB purchases bonds on the secondary market). Germany does not want to condone this money printing behavior, monetizing debt, because of the serious long-term ramifications. Harsh memories about the Weimar hyperinflation, where a wheelbarrow of cash was needed to buy a loaf of bread, remains vivid in many German minds. In essence, the German Court punts probably looking for a quiet way out. All the bluster about standing firm and stopping the printing of money is false bravado. The euro stutters a little lower but remains flat at 1.3568.

Norway’s largest oil producer, Statoil, profit drops 27%. The weak numbers agree with the recent releases by XOM, CVX, Shell and others. The integrated oils are taking a beating with XOM and CVX both in a correction phase down well over -10% over the last month. MT is on the rebound reporting encouraging results so the steel, iron ore and coal sectors should receive a boost. UK manufacturing output is weaker than expected. The BOE may have been aware of and condoned the shady Forex currency trading which is a blow to central banker trust. Oil, metals and copper markets are mixed. Natty gas drops -2.5% back below 5. European markets are flat to higher.

Apple has bought back $14 billion in stock over the last two weeks. CEO Cook says he was surprised at the recent drop in AAPL stock price. Most CEO’s will avoid discussing their stock price since it can make them look foolish in the long run. If Cook is surprised about the recent drop in AAPL stock now, how surprised will he be if it takes another leg lower? The buybacks continue to provide bull fuel in markets. Companies do not invest in equipment or employees and instead use cash and secure cheap financing from the Fed to purchase stock to pump the stock price higher. This makes the rich richer, courtesy of the Fed, without helping regular folks.

Global markets idle ahead of the Monthly Jobs Report. The consensus is 189K jobs with a 6.6% unemployment rate. Last month reported the disappointing paltry 74K jobs number with a 6.7% rate so the revision to last month’s number is key. Traders are all bulled up expecting a jobs number well above 200K but projections are all over the map and many are concerned over the affects of severe winter weather. The BLS is also performing benchmark adjustments for the year creating more confusion with the employment numbers. US futures run higher as the dollar/yen runs higher to 102.27. S&P +7. Dow +50. Nasdaq +20.

The employment report is a disappointing 113K jobs with a 6.6% unemployment rate. Average hourly earnings, the work week and wages are all flat. Last month’s paltry 74K jobs are only revised by a tiny 1K to a shameful 75K jobs. The last two months must be combined to simply keep pace with the 180K jobs needed to handle the new entries into the work force each month. At the same time, ...................







[Text is Redacted: Purchase February 2014-02 to Read the Complete Chronology]

The Olympics opening ceremony occurs but a malfunction causes one ring of the five-ring symbol to not illuminate properly. The rings were also supposed to erupt in an illusion of fire. Russia edits the mistake and shows a video to the Russian population where everything worked properly. In this day and age of technology, it is comical for government leaders to try and mask the truth. This behavior only serves to foster distrust between the masses and government.