Wednesday morning market note
Pre-open, stock index futures are looking to regain what they lost yesterday.
It’s hard to imagine that we aren’t at or near an intermediate bottom, even with the disastrous government we’re suffering through. Essentially, the market is probably close to pricing in the probability of passage of some of Obama’s worst economic idea, including health care nationalization, cap and trade, and card check.
One thing that’s been interesting to see is how FCX, one of the world’s largest copper miners has been holding up extremely well in recent days, and looks to be up nearly 6% this morning. FCX was a market leader on the way down, as copper prices presaged the world-wide recession. Its recent stability makes me think that the market has, at least for now, about finished “discounting” that recession.
ADP announced a drop in private sector payrolls of 697,000 in February, meaning that the official government employment statistics on Friday will probably be a disaster. While I am absolutely not predicting that we will come out of this recession anytime soon (I think it will be more of an L shape recovery than a U or V) I would note that bear markets tend to end well before the peak in unemployment. It would not surprise me to see unemployment get close to 10%, and particularly if card check ("The Employee Free Choice Act") passes.
In any case, we’ve seen a lot of opening rallies fail by the end of the day. My guess is that today we will actually end up on the day, (unless Tim Geithner or Barack Obama start speaking about the budget again.)
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