Stocks rallied on Thursday ahead of Friday’s big January jobs report, which is expected to show the economy added more than 200,000 for the 12th straight month.
First, the scoreboard:
- Dow: 17,877.8, +204.8, (+1.1%)
- S&P 500: 2,062.5, +21, (+1%)
- Nasdaq: 4,763.7, +47, (+1%)
And now, the top stories on Thursday:
1. Greece is now at the center of world markets. Late Wednesday, the European Central Bank announced that it would no longer accept Greek sovereign bonds as collateral, reversing an earlier waiver. On Thursday, Greek finance minister Yanis Varoufakis and his German counterpart Wolfgang Schaeuble spoke at a news conference, with Varoufakis making a number of strongly worded statements, including: “Germany should understand the most what it’s like to be stuck in a gruesome deflation and debt crisis … When I go home today, I will go home to a country where the 3rd biggest party is not a neo-Nazi but a nazi party.”
2. Newly elected Greek prime minster Alexis Tsipras also addressed the financial screw-tightening from the ECB in a speech on Thursday, saying that, “Greece is no longer the miserable partner who listens to lectures to do its homework. Greece has its own voice.” The bottom line though, as Business Insider’s Mike Bird outlined, is that in a worst-case scenario, Greece’s government has about a month’s worth of cash left.
3. After falling as much as 9% on Wednesday, crude oil prices bounced back on Thursday, rising as much as 7% as West Texas Intermediate crude prices moved back above $US50 as crude now looks poised for its second straight week of gains.
4. On Friday morning, we get the premier economic data point of the month: the Jobs Report. Expectations are for the unemployment rate to remain unchanged at 5.6% with nonfarm payrolls growing by 230,000. In a note to clients ahead of the report, Goldman Sachs economist David Mericle said he expects payrolls to grow by 210,000 — less than expected — noting that in January, labour market indicators were a bit weaker on balance. If payroll gains exceed 200,000 in January, it would mark the 12th straight month that the US economy hit or exceeded this level.
5. In central bank news, the Danish central bank — the Danmarks Nationalbank — cut its main deposit rate for the fourth time in three weeks on Thursday, this time taking its deposit rate to -0.75% from -0.50%. The latest cut in interest rates comes as the bank continues to defend its peg for the Danish krone against the euro in the face of a euro that has been steadily declining in value.
6. The latest weekly report on initial jobless claims showed claims rose to 278,000 for the week ended January 31, up from 265,000 the prior week, but marking the first time since April 2000 that claims came in below 280,000 for back-to-back weeks.
7. The US trade deficit unexpectedly ballooned in December, widening to a deficit of $US46.6 billion from $US39.8 billion in November. Economist had expected the trade balance to narrow to a $US38 billion deficit. This marked the largest balance deficit since November 2012.
8. Thursday saw a huge merger in the pharmaceutical industry, with Pfizer announcing a deal to acquire drugmaker Hospira in a $US15 billion deal. The total enterprise value of the deal, including Hospira’s long-term debt, is worth $US17 billion.
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