Non-Farm Payrolls Tonight - Rebound or Another Dip?

kimeng

Publish date: Fri, 04 May 2012, 10:00 AM

Warrants Highlight

Non-Farm Payrolls Tonight - Rebound or Another Dip?

Code	Name	Type	Expiry	Exercise Price
P8BW	STI 3000MBeCW120629	Call	29-Jun-12	3000
P8CW	STI 2900MBePW120629	Put	29-Jun-12	2900
PA7W	STI 3100MBeCW130131	Long Dated Call	31-Jan-13	3100
PA8W	STI 2800MBePW130131	Long Dated Put	31-Jan-13	2800

The US Department of Labor will be releasing its monthly non-farm payroll (NFP) employment tonight, an economy barometer which is tracked by many analysts. A Bloomberg survey shows that the market is expecting a slight pick up in the employment situation, with the analysts’ median estimate forecasting an increase of 160,000, compared to March’s 120,000 increase. Also releasing tonight is the US unemployment rate, which is expected to hold steady at 8.2%.

Other jobs data this week – mostly disappointing
The jobs data this week has not been optimistic. On Wednesday, the ADP employment report shows that private sector hiring slowed to 119,000 jobs in April, its weakest since September 2011. The March figures were also revised down from 209,000 to 201,000.

In Europe, the Eurozone unemployment rate hit a record high of 10.9% in March. The austerity budget across the nations seems to be adding salt to the unemployment wound. The recent spotlight nation, Spain, has the highest unemployment rate of 24.1%, while unemployment for people under 25 is at a staggering 51.1%.

The only positive note was that US initial jobless claims last week retreated to 365,000 claims, compared to 388,000 in the prior week. This is better than the analysts estimate of 379,000 in Bloomberg.

Singapore Market Wrap

Flat Day But Watch NOL

While the broader index traded in a listless fashion yesterday and dipped 0.2% day-on-day (dod) to 3,000.94, some single stocks were active, with NOL, Cosco and Indofood seeing high intra-day volatility.

NOL rose on rate hike hopes
NOL surged yesterday morning to an intra-day high of $1.305 before retreating to close up 2.0% dod at $1.275. Bloomberg highlighted that container shipping companies may potentially hike Asia-Europe rates this week, ending price competition that caused losses to these companies in 2011.

Call NOL MB eCW120903 (P1AW) exercise price $1.50.*

Cosco rises on new order
Cosco rose 1.4% dod to close at $1.065 yesterday after the company announced that it secured a new order to build a semi-submersible accommodation vessel. The contract was worth more than US$200 million.

Call CoscoCoMBeCW121001 (P9IW) exercise price $1.10.*

Indofood
Indofood Agri fell 2.1% dod and closed at $1.43, erasing almost all the gains seen on Wednesday post its results on Monday this week, which saw its 1Q12 net profits fall 27% to 377 billion rupiah. The stock has been falling for the past 3 months and touched a low of $1.425 on Monday this week.

Call IndoAgriMBeCW121001 (P3GW) exercise price $1.80.*

Overnight Market Wrap

Draghi Says Economic Outlook Worsened

The S&P500 ended 0.8% lower yesterday at 1,391.57. The Institute for Supply (ISM) non-manufacturing index fell to 53.5, a four month low. Crude oil price plunged 2.55% to US$102.54 per barrel.

ECB kept their benchmark interest rate at 1% as expected. However, ECB's President Mario Draghi said that the economic outlook has worsened, but did not hint of any further monetary stimulus. Last week, he indicated that ECB was reassessing the growth and inflation outlook.

Overnight Markets

Indices	Last	Change
STI	3000.94	-0.2%
HSI	21249.53	-0.3%
DJIA	13206.59	-0.5%
S&P 500	1391.57	-0.8%
Nasdaq	3024.30	-1.2%

Corporate News

Corporate Announcements

Results Announcement
Tue 8 May: Cosco 1Q12
Wed 9 May: UOB 1Q12, SembMarine 1Q12, Ezion 1Q12
Thu 10 May: Wilmar 1Q12, SingTel 4Q12, Genting Singapore 1Q12, Noble Group 1Q12
Fri 11 May: OCBC 1Q12, Golden Agri 1Q12
Mon 14 May: STX OSV 1Q12

Ex-Dividend Date
Fri 4 May: Wilmar ($0.031), IndoFood Agri ($0.003)
Mon 7 May: UOB ($0.40), CapitaLand ($0.08)
Wed 9 May: DBS ($0.28), Genting ($0.01)
Thu 17 May: Yangzijiang ($0.055)

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