Saudi stocks are down another 4%, lower by 15% over the past four days and lower by 22% from the peak in Jan. I’ve seen no new news this morning but the action speaks to the obvious concern of the region’s unrest spreading. Other markets in the area are weak too with the UAE and Qatar down 3.5%, Jordan, Oman, Bahrain and Israel down 1%+ and Kuwait off by 4%. The ability of the US economy to withstand the reaction of higher oil prices will be seen with jobs data over the next three days. It was more strong demand in the middle part of the 2000’s that drove the rise in commodity prices and thus was better dealt with. This time around however, it is more of a supply issue and thus makes economic activity more vulnerable. Euro zone PPI rose a higher than expected 6.1% y/o/y. The MBA said refi’s fell 6.5% and purchases dropped 6.1% even with mortgage rates back below 5%. II: Bulls 50.6 v 53.3 Bears 19.5 v 18.9
ADP said 217k private sector jobs were created in Feb after a gain of 189k in Jan which didn’t reflect any weather impact. Expectations were for a rise of 180k and the gains again were led by small and medium sized businesses which each added 100k jobs while large companies added just 13k. Of the 217k net jobs created, 202k were in the Service Providing sector with the balance of 15k in Goods Producing. Manufacturing job gains totaled 20k while construction shed 9k jobs. Financial service net hiring was flat. Bottom line, according to ADP, job gains have averaged a very good 218k over the past three months but we know the markets eyes are on Friday’s Payroll figure, especially after weather wrecked havoc with the Jan report that saw a gain of 36k, 50k of which were in the private sector. Also, WTI oil back above $100 tempers any initial enthusiasm after the ADP release.