Needless to say, when the number of jobs lost every month is in excess of 600k, we aren’t going to see an abrupt stop. We will unfortunately set the record for consecutive months of job losses in the next few months.

Monday

Economic Reports: Pending Home Sales

The Pending Home Sales report for March comes out this morning at 10:00 am, and I am a little surprised by the expectations (flat). With all the foreclosures continuing, and prices still sliding, I think this report will show a modest increase in Pending Home Sales.

Earnings Announcements: S

Tuesday

Economic Reports: ISM Services

This could be another month of contraction in the services sector if expectations are accurate. One thing to note when the report is released is if any sectors are expanding versus contracting. Last month the only sector to display expansion was in real estate rental and leasing. In any event, until more sectors are expanding than contracting the economy will continue to languish.

Earnings Announcements: KFT, UBS

Wednesday

Earnings Announcements: CSCO

Thursday

Earnings Announcements: GM, VRSN

Friday

Economic Reports: Non-Farm Payrolls, Unemployment Rate

Earnings Announcements: TM

Source:Employment Numbers Are About To Get Historically Bad

Investors spooked by volatility in other assets such as currencies and equities are buying the metal as a safe store of value, analysts said.

Spot gold climbed to $938.80/939.80 an ounce at 1014 GMT from $932.00 late in New York on Thursday. Earlier it touched a high of $941.90.

“Gold is considered in the first instance at the moment an insurance premium and a safe haven,” said Commerzbank analyst Eugen Weinberg. “It is the equity markets and risk aversion that are moving the market.”

The precious metal rose on Thursday as U.S. stocks tumbled to 12-year lows after General Motors said it was facing potential bankruptcy, and extended its gains as stocks slid in Asia.

World stocks struck a six-year low as Japan’s Nikkei average fell 3 percent in early trade. European shares opened a touch higher, but sentiment remains cautious.

Traders are awaiting key U.S. non-farm payrolls data due for release at 1330 GMT for clues as to the next direction of the markets. “Disappointing data could mean more pressure for U.S. equity markets,” said Standard Bank analyst Manqoba Madinane.

Economists expect the payrolls report will show the United States shed 648,000 jobs in February, compared to 598,000 in January. The unemployment rate is expected to have risen to 7.9 percent from 7.6 percent.

The dollar tumbled more than 1 percent against a basket of currencies, reversing recent gains, as investors braced for the data. Talk that the economy could have lost up to 1 million jobs had hit the U.S. currency hard, traders said.

SCEPTICAL

But analysts remain sceptical about gold’s ability to extend its gains. Commerzbank’s Weinberg said gold’s weak underlying fundamentals, with jewellery demand falling sharply and scrap supply picking up, pointed to a much lower price.

Demand for gold in India, the world’s largest market for the precious metal, remained slack as prices rose for a second day on Friday, while selling of scrap stepped up as gold holders cashed in after the recent price gains.

“There are no hopes of traders buying,” said Haresh Acharya, head of the bullion desk at Parker Agrochem Exports in Ahmedabad. “Sellers are coming in in huge numbers.”

Buying of gold-backed exchange traded funds was also stagnant, with holdings of New York’s SPDR Gold Trust , static for a fifth consecutive session.

Among other precious metals, spot silver tracked gold higher to $13.42/13.49 an ounce from $13.22. Earlier it touched a one-week high of $13.49.

Holdings of the world’s largest silver ETF, the iShares Silver Trust , declined by 82.8 tonnes on Thursday, and are down 282.1 tonnes or 3 percent from the record level they held last Thursday.

Spot platinum firmed to $1,070/1,080 an ounce from $1,058.50. Prices ticked higher on Thursday despite the announcement from General Motors and a spate of other price-negative data.

“That platinum remained comfortably above $1,000 an ounce despite ostensibly bearish news leads us to believe that the market is building a base from which to trade higher,” said HSBC analyst James Steel.

Spot palladium rose to $200/205 an ounce from $196, having earlier reached a 10-day high of $201.

March 6 (Reuters)

The market was also supported by China’s optimism that its domestic economy was recovering and official promises of more swift stimulus action when required. China is the world’s second-largest oil consumer.

U.S. crude was up 98 cents at $44.57 a barrel by 1205 GMT after rising as high as $44.76, while London Brent crude advanced 56 cents to $44.20 a barrel.

Brent has lost its rare premium to U.S. crude because of a decline in U.S. inventories. High U.S. stocks, particularly at the Cushing oil hub, had been keeping the American marker at a discount to Brent.

Markets will be watching for the February U.S. non-farm payrolls data due later in the session, which will probably show unemployment surging to a 25-year high in the world’s top oil consumer.

“Today, traders will turn their attention to the non-farm payroll report which in case of a negative surprise may pose an obstacle to further gains,” said Marius Paun, commodities analyst at ODL Securities.

UNEMPLOYMENT

Friday’s key non-farm payrolls report is expected to show the economy shed 648,000 jobs in February, while the unemployment rate is expected to rise to a 25-year high of 7.9 percent, according to a Reuters poll.

The U.S. dollar weakened before the Labor Department’s release of the payrolls report at 1330 GMT. Weakness in the U.S. currency can boost investor demand for oil and other commodities.

Asian stocks slid following losses on Wall Street due to a warning from General Motors it could go bankrupt and uncertainty about the fate of the banking sector. European stocks made early losses.

Top Chinese officials said on Friday substantial fiscal and monetary stimulus was breathing life back into the world’s third-biggest economy hit by crumbling exports, suggesting Beijing saw no need to boost the existing investment plan of nearly $600 billion.

Oil has traded in a band from around $33 to $50 since mid-December, pressured by slumping demand due to the economic downturn. Expectations OPEC might cut production again when it meets on March 15 have added support.

OPEC has agreed to cut production by 4.2 million barrels per day since September, and a Reuters survey found that members have met 81 percent of their output reductions as of last month.

Angola, which holds the presidency of the 12-member group, will not advocate further production cuts when the group meets, oil sources said, but Venezuela, Algeria and Libya have raised the possibility of a further cut.

“We expect the cartel to put through a modest cut when it gets together and judging by how well the market is holding up, participants seem to be expecting the same,” said MF Global.

March 6 (Reuters)

Oil prices slipped towards $41 a barrel on Friday as economic gloom deepened ahead of data expected to show a big jump in U.S. unemployment.

Non-farm payrolls figures, due at 1330 GMT, are likely to show more than half a million Americans lost their jobs in December, a Reuters poll showed, the highest monthly job losses in 34 years.

U.S. crude for February delivery was down 65 cents at $41.05 a barrel by 1149 GMT, after climbing $1.00 to $42.70. London Brent crude was 43 cents lower at $44.24.

Crude fell 2.2 percent to settle at $41.70 on Thursday, after a 12 percent slump on Wednesday, the biggest daily percentage drop in more than seven years.

“Of course, we are getting used to negative economic news, but this U.S. jobs data is likely to be very, very bad,” said Frank Schallenberger, head of commodity research at Landesbank in Stuttgart.

“Short-term, oil is held within a fairly narrow range between $40 and $45. I don’t see $50 in the near future.”

The market appeared to be largely ignoring evidence that oil producers were cutting output in an attempt to support prices.

Top crude exporter Saudi Arabia is the latest member of the Organization of the Petroleum Exporting Countries to show it is cutting output in line with a deal agreed in December.

It will deepen its supply cuts in February from January to at least three Asian crude buyers, industry sources said on Friday.

Earlier this week, Kuwait and Iran also told customers of bigger supply curbs this month, after the cartel agreed its biggest ever production cut in December in a bid to bolster prices.

One prop of the recent rally that had lifted oil prices since the start of the year looked likely to be removed, after Russia reached an agreement to deploy European Union monitors to ensure the smooth flow of gas via Ukraine.

The threat of widening supply disruptions in Europe from the Russia-Ukraine gas row, as well as Israel’s invasion of Gaza, had boosted oil to a one-month high of $50.47 on Tuesday.

While the Gaza conflict does not directly threaten oil supplies, Middle East unrest can bolster prices because countries in the region pump about a third of the world’s oil.

Oil has fallen more than $100 from a record peak of over $147 a barrel in July, as the global economic downturn hits demand for fuel. It settled at $33.87 a barrel on Dec. 19, the lowest level since Feb. 10, 2004.

LONDON, Jan 9 (Reuters)

Tomorrow morning the Factory Orders report for November is released, and things might get better. The report is expected to show a decline, but not as large of a decline as the previous month. Whether or not this means that factories are starting to get more orders on a consistent basis remains to be seen, but anytime a decline is shrinking, it seems like a small victory.

The final report I wanted to touch on this week is the December Non-Farm Payrolls report. This will be the final report for 2008, and will allow us to look at the overall loss for the year. As it stands, the country has lost just over 1.3 million jobs this year. The expected loss for December is another 475k jobs, which will put us over 1.8 million jobs lost for the year. The scary thing is that the job losses have increased every month for the last four months, so December may be worse than expected. I remember back in mid-summer when some of us were wondering if we would see one million jobs lost this year. Now we are looking to nearly double that amount.

Earnings:
Wed: BBBY, MON

Thurs: BLK, MER

Source: Employment Data Dominates Calendar, Earnings Season Starts Again

Gold fell on Friday as investors sold assets after data showed a much larger-than-expected fall in U.S. November non-farm payrolls.

A sharp dip in the dollar in the immediate wake of the numbers initially sent gold higher, but it quickly gave up gains as the U.S. currency reversed direction.

The precious metal is often bought as an alternative investment to the dollar and tends to move in the opposite direction to it.

Spot gold was quoted at $752.30/754.30 an ounce at 1427 GMT, against $765.70 late in New York on Thursday, having earlier touched a low of $747.20.

“(The data) shows a worsening economic situation, and it is hard for assets to maintain value against that,” said John Meyer, an analyst at Fairfax investment bank.

U.S. non-farm payrolls fell by 533,000 in November, sending the unemployment rate to 6.7 percent, the highest since 1993. Analysts had predicted payrolls would fall by 340,000.

The other main external driver of gold, crude oil, also weighed on the precious metal, as prices dropped nearly 2 percent to below $43 an ounce.

Sharp falls in the crude price this week have sent oil down to a near four-year low. Weaker oil prices can undermine interest in commodities as an asset class, analysts say.

DEFLATION EYED

Interest in gold is being limited by expectations inflation will fall after sharp drops in the price of many raw materials such as crude oil and industrial metals.

Oil prices have shed more than $100 a barrel since they hit an all-time high of $147.27 an barrel in July, while prices of copper, aluminum and tin have also declined sharply.

“Mounting fears over the impact that a potential period of deflation may have on prices, appear to be weighing on sentiment,” said Standard Bank analyst Leon Westgate in a note.

Among other precious metals, silver fell along with gold, and was quoted at $9.22/9.30 an ounce against $9.46 late in New York on Thursday.

Platinum and palladium edged lower but remained rangebound as they consolidated after sharp price falls earlier in the week. Both metals have come under pressure from a spate of bad news from the global auto market.

China posted its third monthly fall in car sales this year in November, official data showed on Friday, setting the stage for a possible double-digit decline in 2009 despite government efforts to pump up consumer confidence.

General Motors said it is eliminating a third production shift at three U.S. plants, leading to almost 2,000 job losses, and will slow production of a range of cars.

Meanwhile BMW said its global sales fell by a quarter in November.

Spot platinum was quoted at $784/804 an ounce, down from $786.50 an ounce late on Thursday. Spot palladium was at $164.50/172.50 an ounce against $166.50.

Jan Harvey, Peter Blackburn
LONDON, Dec 5 (Reuters)

There are plenty of reports this week, but not one that could be considered ‘encouraging’. Both ISM reports this week are expected to show further contraction. The ISM Index is anticipated to show a slight decline down to a reading of 38, while the ISM Service report will likely show a very slight decline to 42.6. Both of these reports need to show a reading above 50 to indicate expansion, so they have a long way to go to reach that threshold.

The Factory Orders report for October is anticipated to show a nearly three percent slowdown, and I wouldn’t be surprised to see this report be worse than expected. Last Wednesday the Durable Goods report showed the biggest drop since October 2006, and I think that this will also carry over to Factory Orders. A slowdown of over three percent won’t be shocking, and could push four to five percent.

The employment reports continue to be the darkest cloud over the market. The Non-Farm Payrolls report for November is announced Friday, and it looks like the economy will shed another 300,000 jobs. When this report is announced, I wouldn’t be blown away if they revise Octobers report to show a greater loss of jobs than initially thought.  The rate of job loss is accelerating, not slowing. At this rate, the country will shed a staggering 1.75 million jobs this year.

Source: Factory Orders and Employment Reports Continue to Drag Down The Market

The Services Index is likely to show a more dramatic shift. Last months reading was 50.2, which shows ever so slight expansion since the reading was above 50.0. This month the reading is expected to dip down to 48.5, signaling contraction.

Factory orders for September are expected to show another drubbing. After posting a 4.0 percent drop in August, this report is expected to follow that up with another 1.5 percent drop in September. With GDP figures last week showing a smaller decline than expected, it may translate into a slightly better final number, although I would still expect to see a negative reading.  The Chicago Purchasing Managers Index showed a much steeper decline than expected and this could be an indication of what to expect from the factory orders report.

The Non-Farm Payrolls report is the dark cloud looming over the market this week. So far this year the economy has shed over 750,000 jobs, and in the final quarter of the year, it shows no signs of letting up. If the current pace continues, one million people will lose their jobs this year, a truly staggering number.

Earnings:
Tuesday: UBS
Wednesday: CSCO, TWX
Thursday: QCOM
Friday: F

Source: Employment Reports A Dark Cloud, Earnings Wind Down

From Reuters:

The Labor Department revised the first two months of the year’s job losses to a total of 152,000 from a previous estimate of 85,000. The March unemployment rate jumped to 5.1 percent from 4.8 percent, the highest since a matching rate in September 2005.

The March job report was bleaker than expected. Economists polled ahead of the report forecast a decline of 60,000 in non-farm payrolls and a rise in the unemployment rate to 5 percent.