Strength in the Market

The strength in the financial market continues. S&P is finding new highs for the day under the financials lead. The sector is roughly up, 2.7%. Energy has also made a come back. It was the worst performing sector yesterday. It is now at 52.20, up 1.6%.

Productivity costs numbers came better than expected. Non farm productivity and unit labor costs are both up, 1.6% and 3% respectively. Jobless claims numbers were not as good as the expectations though. It came to 621K, 1K more claims than expected.

Meanwhile, U.S. Dollar is trying come out from its 6-month lows. The Index is now at 79.22, down a quarter. Gold is on its way back to the $1000 an ounce level. It is $0.20 shy from $980 an ounce. Silver changing hands at $15.72. Platinum is at its 6-month high now finding buyers at $1273. It is half the price from its December 2007 record highs which was changing hands at $2252. Goldman Sachs raise its year-end oil price from $65 a barrel to $85 a barrel. The news helped boost the oil prices, up 2.5% to 67.80 a barrel.

All the Indexes are in green now, holding up their fresh gains. Goldman was upgraded by research analyst Bernstein today from market-perform to outperform. According to Hintz, "Fixed-income recoveries have been a boon for the large fixed-income houses of Wall Street, as large cyclical bets provide significant revenue opportunities,".
He also added that, " Morgan Stanley (MS) and Goldman will both benefit from the rally, but Goldman stands to be "the ultimate winner during a [fixed-income, currency and commodities] recovery."

Not all were upgraded today by analysts. Avis Budget(CAR) was downgraded by UBS to sell from neutral.

Before the Opening Bell

S&P futures vs fair value: +6.50 at 938.20. As the European bourses finished the day with moderate gains ( Britain's FTSE 100 is up 0.44& and Germany's DAX also up 1.04%) , S&P 500 futures started the pre-market activity accordingly.

Today in my estimate is another important day. Productivity and costs will be announced at 8.30am. The consensus estimate for non farm productivity is 1.2% where unit labor cost is 2.8%. These numbers are rather not market movers however, since inflation now is an issue, the productivity growth becomes crucial because it acquires higher wages without the inflationary burden. It also increases the economical wealth of a nation since workers are more productive per hour.

As we talked about it yesterday, jobless claims will be released at 8.30am as well. The consensus estimate is 62K for new claims.

At 8.45am, we will be all ears at federal reserve chairman Mr. Ben Bernake's speech.