WEDNESDAY'S MARKET: Premature Celebration & Why Smart Money Will Sell It

It seems investors are prematurely celebrating today, and it calls for the selling of stocks ahead of what I expect will be another bad jobs data point. Meanwhile, Russian troops persist on Ukrainian territory and tensions are rising between proud armed forces and peoples. Russia is pushing the issue, and I expect will find push back from the Ukraine. A surprise or two is surely in store for investors, because Vladimir Putin does not follow western rules. This will serve as a wake-up call to the so-called civilized world, that you can’t have global civilization when you live with wild animals.

U.S. Markets

Market ETF	March 6	YTD	Last 12
SPDR S&P 500 (NYSE: SPY)	+0.4%	+2.0%	+22.0%
SPDR Dow Jones (NYSE: DIA)	+0.5%	-0.8%	+14.9%
PowerShares (Nasdaq: QQQ)	+0.2%	+3.7%	+33.1%
SPDR Gold Shares (NYSE: GLD)	+0.6%	+11.7%	-15.4%
iShares US Real Estate (NYSE: IYR)	-0.5%	+9.1%	-0.3%
United States Oil (NYSE: USO)	+0.3%	+2.7%	+11.5%
PowerShares DB US$  Bullish (NYSE: UUP)	-0.5%	-0.7%	-5.0%
PIMCO Total Return ETF (NYSE: BOND)	-0.1%	+1.6%	-2.8%

Stocks are up Thursday as we head into the critical Employment Report set for Friday morning release. I think it’s a mistake, and would take bets off here. If markets rise on the report tomorrow, I would likewise take off risk after that news. The Ukrainian crisis is not going away, and a pending and dirty election in Crimea that will demand secession from the Ukraine will bring with it more trouble. The prideful Russians will accept nothing less than domination here, and I’m not sure they’ll get it without the shedding of blood, considering Ukrainian righteousness and western pride. That said, the employment report could be negatively impacted by the sample period, which fell on a cold snowy period. So, forget about holding stock into the weekend; why hold stock heading into Friday even?

International Markets

EUROPE	INTRA	ASIA/PACIFIC	CLOSE
Vanguard Europe (NYSE: VGK)	+1.0%	iShares Japan (NYSE: EWJ)	+1.7%
iShares U.K. (NYSE: EWU)	+0.2%	SPDR China (NYSE: GXC)	+0.8%
iShares France (NYSE: EWQ)	+1.5%	Asia Ex-Japan (NYSE: AAXJ)	+0.9%
iShares Germany (NYSE: EWG)	+0.9%	iShares S. Korea (NYSE: EWY)	+0.9%
Global X Greece (NYSE: GREK)	+1.0%	WisdomTree India (NYSE: EPI)	+2.0%

Global shares seem to be following the same macro-drivers across Asia and Europe this week. If you track the five-day charts of the VGK and the AAXJ you see it. The Ukrainian crisis is clearly playing a critical role in global share trading, with Monday producing a global selloff and Tuesday bringing recovery as events transpired in Eastern Europe. Yesterday we received information about economic growth in China that met with approval and today the ECB held rates steady while German factory orders offered a positive tone. I expect those who bought into today will regret it come Monday morning.

Economic Data

TODAY’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected	Actual
THURSDAY
Challenger Job-Cuts	45,107		41,835
Jobless Claims	349K	338K	323K
Gallup US Payroll to Pop.	42.0		43.1
Productivity	+3.5%	+2.4%	+1.8%
-Unit Labor Costs	-2.1%	-0.5%	-0.1%
Chain Store Sales
Consumer Comfort	-28.6		-28.5
Factory Orders	-2.0%	-0.5%	-0.7%
EIA Natural Gas	-95 Bcf		-152 Bcf
Dudley Speech
Plosser Speech
Lockhart Speech

Economic data offered a mixed tone today, but stocks are likely higher thanks to employment data. Challenger’s Job-Cuts Report showed a lower level of announced corporate layoffs than the prior month. Weekly Jobless Claims fell significantly to a lower level, and was also under economists’ expectations. The fact that this data comes just ahead of the critical monthly Employment Situation Report gives it more weight, though I do not expect it to carry through and true to tomorrow’s data.

On the short side of the table, nonfarm productivity rose at a slower pace than last month and also missed economists’ expectations. Factory Orders slipped again in the latest period, keeping with the prior month’s trend of the same. Ending with an important positive note, Consumer Comfort improved slightly this week, after last week’s sharp gain.

Commodity Markets (10:35 ET)

WTI Crude	-0.0%
Brent Crude	+0.1%
NYMEX Natural Gas	+2.6%
RBOB Gasoline	-1.5%
Gold Spot	+0.6%
COMEX Silver	+0.5%
COMEX Copper	+0.3%
CBOT Corn	+1.2%
CBOT Wheat	+0.2%
CBOT Soybeans	+1.0%
ICE Cocoa	-0.4%
ICE Sugar	+1.1%
ICE Orange Juice Conc.	+0.5%
CME Lumber	+0.1%
CME Live Cattle	-0.4%

Natural gas gained sharply on the latest inventory data, which showed a revival of the big draw. It has been cold again, so this should have been predictable, especially for regulars in this space. Otherwise, energy is not sure what to do on the bizarre day-to-day twists around the Crimean situation. Gold and silver are higher today, though, which is a position I continue to support this year.

Stock Activity

We have important reports from Costco (Nasdaq: COST), Joy Global (NYSE: JOY) and Kroger (NYSE: KR) today mixed in with an interesting list.

EPS REPORTS
Company	Ticker
THURSDAY
21Vianet	Nasdaq: VNET
Alamo Group	NYSE: ALG
Alaska Communications	Nasdaq: ALSK
Alexza Pharmaceuticals	Nasdaq: ALXA
Alon USA Energy	NYSE: ALJ
Ambarella	Nasdaq: AMBA
Analogic	Nasdaq: ALOG
Arabian American Development	Nasdaq: ARSD
Baxano Surgical	Nasdaq: BAXS
Benefitfocus	Nasdaq: BNFT
Biospecifics Technologies	Nasdaq: BSTC
Blackrock Kelso Capital	Nasdaq: BKCC
BPZ Resources	NYSE: BPZ
CECO Environmental	Nasdaq: CECE
Checkpoint Systems	NYSE: CKP
Chembio Diagnostics	Nasdaq: CEMI
Chesapeake Utilities	NYSE: CPK
Children’s Place Retail Stores	Nasdaq: PLCE
Ciena	Nasdaq: CIEN
Comtech Telecommunications	Nasdaq: CMTL
Cooper Cos.	NYSE: COO
Costco	Nasdaq: COST
CPI Aerostructures	NYSE: CVU
Craft Brew Alliance	Nasdaq: BREW
CST Brands	NYSE: CST
CTC Media	Nasdaq: CTCM
Descartes Systems Group	Nasdaq: DSGX
Dot Hill Systems	Nasdaq: HILL
Emergent BioSolutions	NYSE: EBS
Finisar	Nasdaq: FNSR
Five Star Quality Care	NYSE: FVE
FLY Leasing	NYSE: FLY
Fresh Market	NYSE: TFM
FXCM	Nasdaq: FXCM
Glowpoint	Nasdaq: GLOW
H&R Block	NYSE: HRB
IDT	NYSE: IDT
Information Services Group	NYSE: III
Jamba	Nasdaq: JMBA
Joy Global	NYSE: JOY
Korn/Ferry	NYSE: KFY
Kroger	NYSE: KR
Lehigh Gas Partners	NYSE: LGP
LRR Energy	NYSE: LRE
Microvision	Nasdaq: MVIS
Nature’s Sunshine Products	Nasdaq: NATR
Navidea Biopharmaceuticals	Nasdaq: NAVB
Neonode	Nasdaq: NEON
NGP Capital Resources	Nasdaq: NGPC
Novatel Wireless	Nasdaq: NVTL
Perficient	Nasdaq: PRFT
Pinnacle Foods	NYSE: PF
Qihoo 360 Technology	Nasdaq: QIHU
Quanex Building Products	NYSE: NX
Quiksilver	NYSE: ZQK
Repligen	Nasdaq: RGEN
Safeguard Scientifics	NYSE: SFE
Sanchez Energy	NYSE: SN
Skullcandy	Nasdaq: SKUL
Spectrum Pharmaceuticals	Nasdaq: SPPI
Stage Stores	NYSE: SSI
Staples	Nasdaq: SPLS
Stoneridge	NYSE: SRI
Sunesis Pharmaceuticals	Nasdaq: SNSS
Synergetics USA	Nasdaq: SURG
Thor Industries	NYSE: THO
Trans World Entertainment	Nasdaq: TWMC
U.S. Physical Therapy	Nasdaq: USPH
U.S. Auto Parts Network	Nasdaq: PRTS
U.S. Concrete	Nasdaq: USCR
Verastem	Nasdaq: VSTM
Vermillion	Nasdaq: VRML
VimpelCom	NYSE: VIP
Violin Memory	Nasdaq: VMEM
W&T Offshore	NYSE: WTI
Warren Resources	Nasdaq: WRES
Winthrop Realty Trust	NYSE: FUR
Zalicus	Nasdaq: ZLCS

TODAY’S MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
Digital Power (NYSE: DPW)	+74%
Pixelworks (Nasdaq: PXLW)	+43%
Energy Recovery (Nasdaq: ERII)	+38%
Infosonics (Nasdaq: IFON)	+26%
Agios Pharmaceutical (Nasdaq: AGIO)	+22%
Karyopharm Therpeutics (Nasdaq: KPTI)	+22%
China New Borun (Nasdaq: BORN)	+24%
China Precision Steel (Nasdaq: CPSL)	+24%
Sangamo Biosciences (Nasdaq: SGMO)	+20%
Ikonics (Nasdaq: IKNX)	+19%
BIGGEST LOSERS	% Drop
TrovaGene (Nasdaq: TROVU)	-41%
XG Technology (Nasdaq: XGTIW)	-37%
NV5 Holdings (Nasdaq: NVEEW)	-22%
Northwest Biotherapeutics (Nasdaq: NWBOW)	-22%
Spark Networks (NYSE: LOV)	-22%
xG Technology (Nasdaq: XGTI)	-21%
EveryWare Global (Nasdaq: EVRY)	-20%
Dot Hill Systems (Nasdaq: HILL)	-16%
Staples (Nasdaq: SPLS)	-15%
Cross Country Health (Nasdaq: CCRN)	-15%

Other Reports of Interest:
How a War-Driven Flight to Quality Could Lift Annaly Shares (NYSE: NLY)

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