MORNING COFFEE

Report Says Stimulus Bill Did Nothing. A new report by San Francisco Federal Reserve Bank’s Daniel J. Wilson shows that the net job creation from the $814 billion stimulus bill was ZERO.  The Administration has claimed that the stimulus had “saved or created" 4 million jobs.  The report showed that the number was closer to only 2 million and was short lived, costing an incredible $400,000 per job "saved or created."  The report also shows that most of these jobs were temporary and had disappeared by August 2010 leaving the net job creation at zero.  The report destroys the argument by some that the economy and job picture would be better if we spend more.  In fact the unemployment rate continues to climb and now stands at 9.8%.

Tax Deal Revealed. President Obama announced that a tax agreement has been reached with Republicans and the current tax rates will not increase for the next two years.  The deal also keeps the dividend and capital gains tax at 15%, temporarily cuts payroll and Social Security taxes, and extends unemployment benefits. If a deal had not been reached it would have been the largest tax increase in history and increased taxes on everyone.  Much focus had been placed on those making more than 250,000 per year and increasing their taxes, but the poor would have been affected the most, since their tax rate would have increased by 50% going from 10% to 15%.

Earnings Reports

AutoZone (AZO): Reported EPS of $3.77 beating estimates by +$0.34.

Talbots (TLB): Reported EPS of $0.27 beating estimates by +$0.02.

·         Futures at 7:00: Dow +0.7%. S&P +0.8%. Nasdaq +0.8%. Crude +0.9% to $90.22. Gold +0.9% to $1429.40.

·         Asia: Japan -0.3% to 10141.1. Hong Kong +0.8% to 23428. China +0.7% to 2876. India -0.2% to 19935.

·         Europe: London +1.0%. Paris +2.0%. Frankfurt +0.9%.