The main event on Tuesday will be the release of the ADP Private Employment survey at 8:15 am.
The release is the most closely watched tool to predict the official government statistics to be released Friday. In March, the ADP survey showed a loss of 742,000 jobs; two days later, the BLS Nonfarm Payrolls report said the official number was -663,000.
Already released this morning were positive results from the weekly Mortgage Applications report from MBA. For the week ending May 1, the seasonally adjusted index of applications rose 2% to 979.7.
The MBA’s Refinance Index increased 1.2% from the prior week to 5169.3, while the Purchase Index increased 5.0% to 264.3. The Conventional Purchase Index rose 5.5%, and the Government Purchase Index increased 4.4%.
The increase occurred even as mortgage costs had risen to their highest levels since mid-March. The average interest rate on a 30-year fixed-rate mortgage averaged 4.79% in the week , up 0.17 percentage points since the prior week.
Despite the weekly advance, the four-week moving average for the Market Index is down 6.0%.
Before the Bell:
FT: Bank of America is considering selling an $8 billion stake to China Construction Bank in the coming days to relieve pressure on its balance sheet. Results of the Stress Tests come out tomorrow afternoon.
Reuters: The Thursday Stress Tests will ask Bank of America to raise $34 billion in additional capital to satisfy over the next six months. Shares are down 10.5% before the open.
Reuters: General Motors is negotiating with the Treasury to convert 50% of debt to common stocks by June 1. If the plan fails, GM said it will file for bankruptcy. Shares down 15% ahead of the bell.
NY Times: For banks seeking to repay TARP funds, the U.S. government will require banks to demonstrate an ability to raise independent capital without taxpayer aid.
FT: The SEC brought its first case of insider trading involving credit default swaps (CDS).
FT: Low-tax countries are angry about President Obama’s crackdown on offshore tax havens.
In the Media:
Government Setting Conditions for Exiting Banks: “Banks that want to return Troubled Asset Relief Program funds will have to demonstrate their ability to wean themselves off another major federal program, according to senior government officials, making it less attractive for some banks to return the money. The other program, a guarantee of debt issuance offered by the Federal Deposit Insurance Corp., allows firms to borrow money relatively inexpensively. Banks have $332.5 billion of debt outstanding under this program, which began last fall." -- Wall Street Journal, page A2
