For traders this is the most important data point of the month

Double jobs day
The chase by Frances Horodelski:

“If jobs were so important, everyone would have one”

For traders this is the most important data point of the month. Way back in the caveman days of trading, we used to all hang around the Dow Jones Newswirewaiting for the CPI data every month – that was the most important data point when inflation was rising and the Fed was tightening, but that is a story foranother day.

The U.S. estimate for jobs is around 200,000 jobs (although the consensus has waivered to 195,000 a few times) versus last month at 162,000 with a drop in the unemployment rate to 6.6%. Economists at RBC say they will be watching wages. “Given the uninterrupted uptrend in hourly wages, a reversal higher (estimate 0.2%) in hours means there is potential upside to the wage pie near-term. This is after all what matters for consumption (not the level of headcount).”

Those wages are needed to pay debts and according to a recent report on delinquency rates in the U.S. on consumer debt, those wages are needed.

Mortgage debt delinquencies (which were 1.5% in 2007) are now 4.5%; student debt delinquencies are running at 12%.

In Canada, it is also jobs day. After a crazy year of big increases and big declines, this month the dart has landed on an estimate of +22,500 for March. The unemployment rate is expected to be unchanged at 7%.

Another casualty of the railcar capacity issues – ethanol. According to a letter to Dennis Gartman “our ethanol plants have been running at reduced capacity not for economic reasons but because our finished ethanol tanks are almost running over with no railcars in sight.”

Also with reference to Gartman, he has added “coal” in the past few days as it seems inordinately cheap. Yesterday morning our colleague Andrew McCreath noted his homework was being done on the thermal coal names such as Peabody (BTU) – you have two days in front of you to do your own analysis.

Let’s talk rumours. Yesterday it was that Lululemon (LULU-Q) could be a take-out target. With 21% of LULU short, that could be a painful for traders. This morning, those who follow options activity suggest that Kellogg (K-N) might be a target. Almost 21% of Kellogg is owned by the Kellogg foundation. Remy Cointreau was up 11% at one time in Paris trading as a trading blog said Brown-Forman is working with Goldman Sachs to consider a possible purchase.

Some interesting weak names in the market so far this year (and some which have been previous darlings): Whole Foods (-10%), Amazon (-17%), Mattel (-16%), Catamaran (-4%), Avigilon (-3%), Empire (-8%), Horizon North (-16%), Dream Unlimited (-9%) and Air Canada (22%). AC.B was upgraded to buy at Scotia this morning with a an outperform and $7.25 target.

In research, an item that stands out is one on Apple from BMO Capital Markets that notes that June quarterly numbers on the street, in their view, are too high especially the revenue line. BMO however has raised its own earnings estimates due to the aggressive share buyback, they rate the stock outperform with a $565 target (up $5 from the previous target). Three catalysts for the shares are highlighted: 1) large screen iPhone; 2) a wearable category; 3) more services. Apple did lose a patent-use bid in a $2 billion Samsung trial.

Canadian politicians are talking today: Industry Minister Moore is in Waterloo on the digital economy (BNN will be there as will the CEO of OpenText), Transportation Minister Raitt will be presenting at the CAPP conference speaking on energy on behalf of Energy Minister Rickford. We will be interviewing the head of pipelines from TransCanada and the CEO of Nuvista – both from the conference.

Grubhub was priced last night (the online restaurant delivery and pick-up service) at $26 (above the $23-$25 range). It starts trading today under the symbol GRUB. And while it seems like the IPO market is running over, it is only in the number of deals, not dollar value. Last February, there were 179 IPOs for a total value of $33.64 billion. This February, 212 deals but only $17.8B in value. March 2013 233 deals at $30.7 billion; this March 262 deals but 12% less in value ($27 billion).

Markets are higher in Europe and the futures. Chinese markets bounced. Everyone is waiting – for what? The Blue Jays opener? Disney’s Captain America? Itis a big day. Enjoy.