Friday, May 3, 2013

BCOR Up 19%+; NFP Beat Expectations; "Bull on bull ..." ...

It appears the 'macro worry' that we had yesterday, thinking it may limit BCOR's increase after good Q1 numbers, was actually a non-worry.  BLS reported NFP change for April higher than our estimate and the Street's.  We note that after the disappointing ADP report on Wednesday, many economists lowered their NFP guesstimates, which brought the consensus down to 145K. BCOR was upgraded to a 'buy' by Craig Hallum research, and the stock is up more than 19% on heavy volume.  IACI is up 2.6%; AVID just hit the $7 mark for the first time since late Feb., and FB is down 0.3% or 9c.

Non-farm paryolls increased by 165K in April, higher than our 150K and the Street's 145K estimates.  The data (which we hope is not 'fiddled' with) provided by BLS shows slight weakness in goods-producing jobs, more specifically in construction.  Strength was apparent on the private-service side, with leisure & hospitality, temp, retail, and healthcare leading the way. 

In terms of hours and earnings, although average pay increased by 4c, average weekly hours worked declined to 34.4 from 34.6 in March. 

In addition, while the headline unemployment rate declined by 10bps to 7.5%, what we consider as the real unemployment rate (U-6 in the BLS report) increased for the first time this year, up 10bps to 13.9%. 

BLS also revised the last two months' NFPs much higher, which is good news. However, lately, including the monthly revisions, something a bit unusual has happened - monthly net changes in ADP and BLS (NFP) reports have been diverging a bit.  Who knows what data by which org is being 'fiddled' with or if everything is legitimate, but that's something to keep an eye on. 

Lastly, the way the equity market is moving, as someone tweeted earlier this morning, "You are witnessing bull porn here ... Bull on bull action"!

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