After reading yesterday's comments on Bloomberg that Bush and Paulsen were closely watching the stock market, I sensed that the odds favored stocks opening higher this morning.
Yesterday's ISM Report revealed a sharp downturn in the Services sector which has been the strongest sector of the economy and jobs market. But, this morning the preliminary nonfarm productivity for the 4th quarter came in ahead of expectations (+1.8% v. estimate +0.5%).
The Asian markets dropped sharply overnight; Hong Kong -5.4%, Japan -4.7% and India down -2.8 %.
Yesterday's sharp fall did not have any signs of capitulation, but left the market slightly oversold in the short run. I would expect a brief rally to work off the oversold situation, and then another attempt to the downside.
In other news, Rio Tinto (RTP) said no to BHP Billiton's $147 Billion Bid.
On the jobs front, Americans have lost jobs to off shoring and imported labor. As I said a few paragraphs ago, "the Services sector has been the strongest sector of the economy and jobs market", and now waitresses and bartenders are being laid off. This is due to the fact that consumers are not spending as much in restaurants.
Here is a little piece that has been flying around the internet lately. It kind of sums up John McCain's comments that the jobs lost are not coming back. If McCain becomes President, the war will never end, more wars will be initiated, and more lives and jobs will be lost.
Joe Smith started the day early having set his alarm clock (made in China) for 6 a.m. While his coffeepot (made in China) was perking, he shaved with his electric razor (made in Hong Kong). He put on a shirt (made in Sri Lanka), designer jeans (made in Singapore) and tennis shoes (made in Korea). After cooking his breakfast in his electric skillet (made in India), he sat down with his calculator (made in Mexico) to check his budget for the day. After setting his watch (made in Taiwan) to the radio (made in India) he got in his car (made in Japan) and continued his search for an AMERICAN job. At the end of yet another discouraging and fruitless day, Joe decided to relax. He put on his sandals (made in Brazil), poured himself a glass of wine (made in Chile), turned on his TV (made in Indonesia) and wondered why he cannot find a job in America.
After watching the primary election "dog and pony" show yesterday, I was reminded of a short rhyme I learned in church as a young boy. I changed the last word a little to reflect what I think is going on.
"Here is the church, and here's the steeple Open the door and see all the people" (Sheeple?).
If you want to have a little fun, listen to conservative radio host Michael Savages (The Fix Is In) take on the election, and our current Presidential choices.
There is no way the global power elite would ever let Michael have a TV show, but a lot of what he says is right on.
