Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Mark Adams who wrote (253723)	8/3/2003 12:04:21 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

Some thoughts extracted from MOODY'S GLOBAL CREDIT TRENDS - DAILY MARKET WRAP BIGGEST THREE-MONTH GAIN BY TEMP JOBS EVER July's private service sector hiring was led by the creation of +73,100 jobs in administrative and support services that included the addition of +41,900 new temporary employees (temps). About +122,000 new temp jobs were created during the three-months ended July, which was without precedent. The old record for temp job creation over a three-month span was the +115,000 of 1999's final quarter. Because temps constitute the most flexible component of employment, pronounced shifts in temp jobs might offer an early hint regarding the near term direction of overall employment. Thus, the recent steep upturn by temps may be signaling the approach of a broad-based advance by payrolls. Nevertheless, hours of work have yet to grow in a manner that might support a more upbeat outlook on hiring activity. The crushing loss of factory jobs cut private sector payrolls by -34,000 in July. Meanwhile, July's loss of -10,000 jobs was the fifth consecutive decline in government payrolls. SALES UPTURN WOULD RESTART HIGH YIELD AND STOCK RALLIES Given the declining trend of the high-yield downgrades per upgrade ratio, July 2003's speculative-grade yield spread of 555 basis points seems reasonable. When the high-yield downgrade per upgrade ratio last trended down to 1.7:1 in April-May 1992, the high-yield spread over Treasuries had temporarily narrowed to 410 basis points. For now, the thinning of high yield spreads may halt until a renewed upturn by the yearly growth rate of recurring profits is practically assured. Evidence of a faster rate of growth for business sales will be required. The year-to-date rallies of both equities and high-yield bonds will probably not resume until a broadly distributed acceleration of revenues arrives. The realization of faster revenue growth would probably remove doubts regarding both the adequacy and the sustainability of the nascent business cycle upturn. Investors would be gladdened if more companies were compelled to increase staff in response to greater-than-anticipated sales. The words "sales at or above plan" are still not being heard with a great enough frequency. The fact that Treasury yields jumped sharply despite relatively few claims of sales being at or above plan can only weigh on the confidence of investors, businesses and consumers. moodys.com