December Jobs Reports In Focus

Economic Data

- (BR) Brazil Nov Manufacturing PPI M/M: 0.3% v 0.2% prior; Y/Y: 6.6% v 6.4% prior
- (US) MBA Mortgage Applications w/e Dec 28th: -10.4% v -11.2% prior
- (US) Dec Challenger Job Cuts: 32.6K v 57.1K prior; Y/Y: -22.1% v +34.4% prior
- (US) Dec ADP Employment Change: +215K v +140Ke (largest gain since Feb 2012)
- (SG) Singapore Dec Purchasing Managers Index: 48.6 v 49.5e; Electronics Sector Index: 46.6 v 47.7e
- (US) Initial Jobless Claims: 372K v 360Ke; Continuing Claims: 3.245M v 3.210Me
- (US) Dec ISM New York: 54.3 v 52.5 prior

- The post-cliff euphoria came to a rapid end today, with both European and US equities trading in the red. As of mid morning, the Nasdaq and S&P500 are nearly flat on the day, after trading down more than 0.2% a piece. The DJIA is down 0.1%.

- The 113th Congress is being seated this morning and few have any illusions that this one will be any more effective than the 112th Congress. Chances of a revolt among the House GOP during today's leadership election are slim, and it looks like Boehner will again be elected speaker.

- Two jobs reports this morning are focusing traders' attention on Friday's December payrolls data. The December ADP report indicated that private jobs jumped 215K, however the Labor Dept weekly claims rose to a larger-than-expected 372K in last week of the month. Note that the number has been impacted by estimates for nine states rather than hard data which were used due to state office closings for the holidays. Tomorrow's non-farm payrolls estimate is around 150K. Note that Goldman Sachs now expects a large 200K gain and Credit Suisse is calling for a 185K increase.

- EUR/USD slid even lower this morning, with the pair testing several times toward the 1.3080 key level. The wary tone strengthened the greenback against the yen overnight, with USD/JPY only a hair above the session low of 86.78 as of writing.

- The December same-store sales reports were really excellent, with strong outperformance seen among many names across categories. Apparel names Gap, Ross Stores, TJX and Stein Mart crushed consensus estimates. Costco was twice the expected figure. The department names were strong. Limited Brands, which consistently tops expectations, notably missed on comps thanks to flat sales at Victoria's Secret. LTD is down more than 5%. Smaller apparel names Cato and Wet Seal had disastrous comps. Note that dollar names are weak after Family Dollar's Q1 earnings miss and lowered FY13 guidance. FDO is down 11.3%, while DG fell as much as 6% and DLTR dropped nearly 4% before recovering.

- Shares of both Ford and GM are up more than 2% this morning on relatively good December sales numbers. Ford said its results were the strongest December numbers since 2006. Both firms put their initial estimates for 2013 SAAR above 15M units, although this remains well below the pre-recession SAAR figure of 17M units.

- Bill Ackman is throwing in the towel on getting General Growth to sell itself. Ackman has sold Brookfield Asset warrants to buy 18.4M shares. Brookfield, in turn, has offered GGP to buy them for $272M. Pershing has also agreed to keep its stake in GGP below 10% the next four years as a passive investor. GGP is down more than 3%.

Looking Ahead

- 14:00 (US) FOMC Minutes
- 16:00 (KR) South Korea Dec Foreign Exchange Reserves: No est v $326.1B prior
- 16:30 (US) Weekly API Crude Oil Inventories
- 17:00 (US) Dec Total Vehicle Sales: 15.30Me v 15.46M prior; Domestic Vehicle Sales: 11.70Me v 12.01M prior
- 20:45 (CN) China Dec HSBC Services PMI: No est v 52.1 prior