Good Morning. Add about 18 more inches to the tab...that brings the snowfall total to around 7 feet this season. The Federal Government is closed again today and many market participants are still stuck in their homes.

The headline grabber this morning is new news regarding Greece. From the WSJ:

Euro-zone countries will provide "determined and coordinated action if needed" to preserve stability in the currency union, European Council President Herman Van Rompuy said at a summit of European Union leaders Thursday, but he gave few details of how that would be provided and no indication that direct aid to Greece, the zone's sickest member, was imminent. 

Plain and Simple: although nothing has been done to "officially" rescue Greece yet, support is "officially" mobilizing in the event an emergency effort is "officially" needed. This "officialness" is intended to serve as a backstop for investor confidence and help avoid the further spreading of panic

We got the usual Thursday read on the health of the labor market this AM. Initial Jobless Claims declined by 43,000 to 440,000 in the week ending February 6, 2010. Consensus estimates called for 465,000 new claims, so this print was much better than anticipated. Continued Claims moved lower as well, from 4.617 million in the previous release to 4.538 million in today's data, this is a decline of 79,000 people and the lowest number of continued claims since January 3, 2009. Emergency benefits fell by 171,000 to 5.68 million.

Jobless Claims data has been volatile of late, generally skewed toward an unexpectedly larger number of initial claims. These were functions of what the labor market was calling "administrative" adjustments.  A Labor Department official said, in today's report, that the administrative backlog was now mostly "washed out".  This implies, in releases going forward, that jobless claims data will be a better barometer of the actual health of the labor market.  The official added:   "By and large we are resuming a normal level with all states reporting an appropriate base level" . 

The White House release a jobs report of their own this morning. The Council of Economic Advisors  expects an average of 95,000 jobs to be created a month in 2010. READ MORE

This all sounds like good news for stocks...but they are not rallying.

Niether are interest rates though, the 10 year note is hovering around the outer limits of the recent range, trying to figure out if stocks are gearing up for a bullish bounce.

The FN 4.5 is pretty much flat...+0-02 at 100-20.

So my obvious observation is...why are stocks weaker? This is all good news for equity positions right?

Stocks are focused on Greece. Unfortunately while lots of "officials" are now officially involved, this is still just jawboning. The general strategy policy makers are employing is one similar to the Fed's exit strategy. EU officials must read and react to the market's sentiment on whether or not the Greek debt crisis is being sufficiently managed. If the bully pulpit can buy some time for extra "strategery"...don't expect government officials to be doing more than necessary. If the market sniffs out stall tactics, traders may force a more concrete plan out of the EU.

That explanation address the emotional side of the marketplace. The more simple rationalization is that traders took profits on short positions once the "agreement" news hit wires. Following a better than expected jobless claims print and a hopeful outlook from the CEA regarding job creation, one might expect that short covering to snowball into a bargain buying spree...not the case. The RANGE is moderating further progress in stocks at the moment, until a more detailed, CONCRETE, plan is offered from EU officials, risk buyers are not likely to take the jawboning bait.

Either way, none of the above news was really bond market friendly. Add in $16 billion in long bond supply and that is not the best recipe for lower interest rates. Watch the stock lever....we are testing the outer limits of our supportive range, we are due a period of price exploration in a higher, less mortgage rate friendly range.

I am going to attempt to head to the office now. Wish me luck!