Jobs Friday!
The chase by Frances Horodelski:

There are so many things to say. The big story will be jobs (Canada estimated at +5,000 after two months of surprisingly weak jobs growth and in the U.S. 228,000 with analysts saying anything above 200,000 and below 300,000 will be in the range). There is the reaction to results last night with Twitter and LinkedIn rallying and GoPro down.

The price of oil is rising again this morning (up five in the last six days). This is the biggest gain in a two week period since 1998 and the volatility is running at six year highs. (See below for one analyst’s views). The leaders from France (Hollande) and Germany (Merkel) are meeting with Vladimir Putin today and there has been modest movement with at least a temporary humanitarian truce in the devastated town of Debaltseve to allow citizens to be evacuated from basements and other hiding locations. Meanwhile, Germany continues to be the standout beneficiary of easy monetary policy and the weak euro. Today’s evidence, industrial production which turned positive for the month of December (and last month’s number revised from -0.1% to +0.1%). While soft relative to expectations – the sign change is important to analysts.

For reference, here are the new lows on the TSX this week – Genworth (MIC), Industrial Alliance (IAG), TMX Group (X), Fairfax India (FIH.U - new company listed in Toronto and went public last month raising $1.0 billion at $10 per share) and Manitoba Tel on dividend concerns (MBT). In the U.S., in the S&P 1500, Prudential Insurance (PRU), Ralph Lauren (RL) and iRobot (IRBT).

In other news, BCE (BNN’s ultimate parent) was downgraded by National Bank and TD Securities to sell this morning (although their ratings are underperform and reduce, respectively).

“The world doesn’t work on Wall Street Time”. This quote comes from a report written by Credit Suisse’s oil service analyst who puts his own (editorial)spin on the bounce in crude believing it is just that. He notes that it isn’t the supply/demand balance that is as much the issue, but the derivative, thatis how quickly that imbalance is growing. Here are his numbers. At the end of 2014, production growth was 1.6-1.8M bopd. Global demand grew at about half that rate. According to the analyst “It isn’t that we are only 1-2 million barrels over supplied, it’s that the surplus is set to double in only one year. We don’t need to add 1.6-1.8M bopd to global supply in any one year for about five years.” His view, everyone is looking for a way for the pain and hurt to stop – but he doesn’t see how. “We haven’t fixed the problem”.

So if oil will remain weak or volatile, it is likely that we could continue to see heightened volatility everywhere. According to a recent review byScotiabank, intraday ranges (high-low) for currencies have expanded dramatically. In the first half of 2014, the range for the Canadian dollar during anyone day was 0.59 – relatively modest versus the Euro (63) and the pound (77). So far this month, that range has more than doubled to 135 points.

Causal versus coincident: Just a little story from my favourite story teller, Art Cashin (who quotes the Economist). “In medieval Holland, it was notedthat there was a correlation between the number of storks living on the roof of a house and the number of children born within it. The relationship was so striking that according to the rules of maths that govern such things, you could say with great confidence that the results were very unlikely to be merely random. Such a relationship is said to be ‘statistically significant’.” But do storks somehow increase human fertility? If you believe so, then you want to sell stocks because of the Super Bowl indicator and the January indicator.

I’m going to cut it short today. We have a full agenda on BNN today including coverage of jobs (and what it means for our dollar, their dollar and thedirection of rates), we’ll be speaking with Bill Priest from Epoch Investments for an extended interview and it is Your Money Month and we will continue to have direction, thoughts and tips on how to manage your money.

Have a good weekend.