FRIDAY 5/2/14; Ukraine Launches Offensive; CVX; EL; Monthly Jobs Report; Factory Orders; BRK/A

Dollar/yen is buoyant at 102.47 so US futures are flat to higher. Global markets are idling ahead of the US Monthly Jobs Report. Asia markets are uninspired trading mixed and sideways. Japan household spending numbers are encouraging but the numbers may be boosted due to buying ahead of the higher sales tax implementation. China markets remains closed until Monday. UK markets are closed on Monday for May Day. Japan and South Korea markets are closed Monday and Tuesday for holidays.

UK April Construction PMI is rebounding but weaker than expected. RBS leaps 11% on earnings far stronger than expected. Restructuring charges were expected but not reported so these and other one-off litigation charges will impact future results. European markets trade flat. Currency markets are flat. Euro zone manufacturing PMI is better than expected but the euro zone unemployment rate remains elevated at 11.8%. Fitch maintains Slovenia’s BBB+ debt rating but raises the outlook to stable.

Ukraine forces launch a large-scale offensive to retake Slovyansk, a city with a 120K population. PM Yatseniuk says Ukraine is entering a dangerous 10-day period. Two Ukraine helicopters are reported to be shot down with one pilot dead but the details are sketchy. Obviously, if the pro-Russian forces have the firepower to shoot down a helicopter they are a military force and not simple protestors as Putin says. Casualties are occurring from the Ukraine offensive. People are dying. Putin says the action by Kiev kills the hopes for peace through the Geneva talks.

The consensus for the Monthly Jobs Report is 215K jobs with a range of 200K-225K jobs and 6.6% unemployment rate. Whisper numbers are 250K with some optimistic analysts looking for a huge 275K-300K blow-out jobs number. So traders expect a number above 200K at a minimum. Last month was 192K jobs which was a disappointment since well over 200K jobs were expected. The unemployment rate is currently 6.7%. Wages remain very important since the Fed will continue to be unable to increase inflation unless wages rise. The excitement and bullishness for the jobs number increases as the East Coast rises. Many analysts say that jobs will increase steadily from here forward. S&P futures are +2.

The pharma M&A frenzy continues. PFE raises the bid for AZN to 107 billion but AstraZeneca throws it back in Pfizer’s face in quick order. Bayer continues exclusive talks with MRK to buy the consumer business unit. Merger and takeover announcements are occurring almost daily. At 8:27 AM, S&P +2. Dow +&. Nasdaq +2. Dollar/yen 102.48. Euro 1.3862. Gold 1286. WTIC oil 99.71. Brent 108.39. Copper is about +0.5% higher. The 2-year yield is 0.41%. 5-year 1.66%. 10-year 2.63%. 30-year 3.42%.

At 8:30 AM, the Monthly Jobs Report is 288K jobs, a big jump higher and the highest number in two years. The unemployment rate drops .......................








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After the bell, JPM pukes -1.1% as news hits that the bank has $4.7 billion in funds exposed to Russian investments. JPM lowers guidance for Q2 citing less client activity and a challenging economic environment ahead. BRK/A earnings miss estimates dropping nearly -7%. This will dampen the mood at the yearly Berkshire Hathaway meeting in Omaha this weekend. Meyer Shields, an analyst at Keefe, Bruyette & Woods, is excluded from asking questions at Buffett’s Q&A session tomorrow since he may be critical of the company.  Buffett is constantly fostering the ‘aw-shucks’ personality despite events ongoing behind the scenes such as his benign approval for excessive executive pay despite his words otherwise. The bank sector trading will be important on Monday. CMG raises prices at restaurants to combat food inflation.

The Benghazi scandal continues to gain legs with heated exchanges occurring between Jay Carney, the Whitehouse press spokesman, and reporters asking questions. House Leader Boehner announces that a special committee will now look into the scandal. In addition, current Secretary of State Kerry receives a subpoena to testify on 5/21/14 about his knowledge of the Benghazi terrorist incident. The Whitehouse may have been placing the concerns of winning the 2012 presidential election and protecting the president’s reelection campaign over the decision to send help to the four Americans dying in Benghazi. The military was ready to act and help on 9-11-12 but the order never came for them to proceed.

The first MERS case appears in the US brought here via an airline flight that landed at Chicago’s O’Hare International Airport a few days ago. A doctor treating patients in the Middle East carried the virus and became ill over the last couple days. This virus has a high mortality rate of about 50%. There are currently over 400 infected MERS patients in 12 countries with over 300 in Saudi Arabia. The doctor that brought the MERS virus to America flew from Saudi Arabia to London to Chicago then took a bus to his home in the State of Indiana. All riders on that bus are being tracked down to receive medical attention.