Hello, QE3?

The January nonfarm payroll number was a disappointment—36,000 vs. consensus of 150,000, though the headline of 9 percent unemployment was well below consensus of 9.5 percent. The Street pays more attention to job creation—futures moved down and then quickly snapped back. Traders immediately revived the Fed Put—that if employment does not improve the Fed will just keep printing.

You can argue that the weather skewed the numbers, that the survey is meaningless—but if the numbers were uniformly strong no one would make that argument.

The Fed doesn't have to tighten, the market is doing it for them: hitting the recent upper limits for the 10 year Treasury yield at 3.59 percent.


1) Get 'em out the door now: Ally Financial announced it had picked four banks for their upcoming IPO—so in the past two weeks, we have seen Nielsen go public in a $1 billion IPO, Kinder Morgan announcing a $2.3 billion IPO, now Ally. Up next iin the billion-plus IPO: HCA, Toys R Us, and Skype.

2) Las Vegas Sands down 5 percent pre open, earnings were ahead of expectation but revenues a bit short. Expectations were clearly for a stronger quarter. Singapore was strong, Macau revenues a bit light, and the Sands and Venetian in Las Vegas were also strong.

3) Pulte reported a wider loss than expected—net orders were down 19 percent, and while it is tough to read through these reports it is clear that there is little real improvement in what matters—orders.

That hasn't dampened the hope for a turnaround. Home builders have outperformed the market for several months now, but the bottom line is NO ONE I know thinks there is suddenly going to be a strong spring selling season, not even in my own family (my wife is a Realtor, my brother is a home builder, and my father is a retired builder). Not even Goldman Sachs: "Fade the Rally in the Homebuilders Heading into Spring Selling Season" was the title of a recent report from them.

Regardless—economic news has been strengthening and surprising on the upside consistently—just look at the January retail same store sales, the Chicago Purchasing Managers report, the ISM, and the ISM non-manufacturing numbers—all stronger recently.

4) Goodyear Tire up 7% in afterhours Appaloosa Management founder David Tepper reporting yesterday a 6.1% stake in GT. They too are grappling with soaring raw materials cost.

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