FRIDAY 2/6/15; MCO; Monthly Jobs Report; Greece Credit Downgrade; American Female Hostage in Iraq Feared Dead

Asian indexes trade mixed ahead of the US Monthly Jobs Report at 8:30 AM EST. Japan, Australia and Korea are higher. Shanghai and Hong Kong indexes trade lower. Oil prices continue higher which provides a bid for oil, gas and energy stocks. NIKK +0.8%. McDonald’s Japan and Nikon sell off while Takata, the troubled air bag manufacturer, rallies +4% 















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and a dividend are receiving their heads on a platter instead. If receiving a 3% divvy, two or three years worth of dividend income is wiped out by capital loss in a heartbeat.

The jump in Treasury yields sens the utes, REIT’s and other interest rate sensitive stocks lower. VNQ collapses -3%. US Treasuries sell off after the jobs report (prices down yields up). Last evening and early this morning the 10-year yield was at 1.82%; it leaps to 1.96% an astounding 14 basis points in a few hours time. The 2-year yield was 0.52% less than 24 hours ago and jumps to 0.65% a 13 basis point jump. The 5-year yield increases 17 bips and the 30-year yield is up 10 bips during the last 10 hours. The 5-year was sold off the hardest.

US Treasury yields are; 2-year 0.65%, 5-year 1.48%, 10-year 1.96%, 30-year 2.53%.

Financials, the worst performing sector in 2015, lead the bullish parade. XLF gains +0.8% despite the late-day market selloff. The energy sector moves sideways with XLE dead flat on the session. Although oil, gas and energy stocks are stabilizing and attempting to form a bottom there is likely choppy sideways trading ahead. Those looking for a long entry point to ride a recovery in the energy sector will probably be disappointed as well as those continuing to short the names. The broad market is in a choppy whipsaw sideways pattern this year chewing up bulls and bears.

For the week, the major indexes print lower lows and then higher highs and finish above the prior week’s highs. This key bullish reversal favors the upside for stocks. The SPX gains +3%, the Dow gains +3.8%, Nasdaq gains +2.4% and Russell 2000 is up +3.4%. Biotech is smacked in the face with IBB losing -2% creating the weakness in the Nasdaq. Tech stocks kept pace with the broader market with XLK up +3%. XLF is up +5% so financials are the big success story on the week. GS gains +6.4% and BAC is up +9%. Trannies keep pace with TRAN up +3.3%. Utilities, UTIL, collapse -3.7% on the week and fall -8% from the top two weeks ago.

Oil stages a strong two-week comeback. WTIC oil closes up +9.4% on the week at 52.34 after a roller coaster ride gaining +10% one day, then losing it the next, then regaining it the following day. Brent oil is down -11% this week to 58.12. Copper recovers strongly up +3.6% during the week. Gold loses -4% and silver is down -3%.

After the closing bell, MSI leaps +7% on takeover rumors. Motorola Solutions is courting potential buyers. JPM’s troubles with the Chinese hiring probe continues. JP Morgan Chase is under investigation by Chinese officials for hiring relatives of government officials to gain favoritism and win lucrative accounts and contracts. JPM trades up +0.3% in AH trading and is up a robust +6.5% this week helping fuel the financial sector rally.

Euro 1.132. Dollar/yen 118.96. Pound 1.5246. WTIC oil 51.69. Brent oil 58.16. Natty gas 2.579. Gold 1235. Silver 16.69. Copper 2.586.

The Anthem cyber attack is already resulting in nefarious activity. Email scams are appearing pretending to help computer users that may be exposed to the Anthem security breach when clicking on the information will download destructive malware. Anthem is the second largest health insurance provider in the US and the information of millions of Americans including social security numbers, telephone numbers and addresses are in the hands of criminals. ANTM is down -1.1% in today’s session but up on the week.

The West Coast dock troubles continue with a shutdown occurring this weekend. The Pacific Maritime Association (PMA), representing management of the dock operations complains that paying the union workers for lackluster job performance is no longer viable. The dock yards will remain open to load cargo containers on trucks and trains to alleviate the congestion but ship unloading operations are placed on hold.

There is no space available to unload the cargo ships since the docks are stacked to the gills due to the union work slowdown. If a new contract agreement between the dock workers union and management occurs, the situation can quickly return to normal in a few short weeks. If the distrust grows and shutdowns increase, the US as well as China, Japan and other Asian economies will be negatively impacted. Retailers cannot sell goods that are not on the shelves.

The news from the Ukraine peace talks in Moscow will greatly influence markets early next week. The SPX will jump 20 or 30 handles if a new truce is agreed to while the same action may occur to the downside if the talks collapse and the ongoing civil war in eastern Ukraine escalates. Of course the Greece drama and the theatrics with oil prices will continue impacting market direction as well.