Updated: Aug 31
Happy Market Update!
It’s once again Jobs week! Lots of interesting stuff already this week…and I don’t mean about how a former President was arraigned on 34 felony charges. My guess is that we will just keep hearing about that guy long after he dies. I was done with him after The Apprentice. But I digress.
I know this is a bit late this week, but I wanted to make sure I had some updated jobs quotes for tomorrow’s monthly (March) jobs report. And wow! Am I glad I waited.
JOLTs started off the week with a bang. JOLTS stands for Job Openings and Labor Turnover Survey. This number dropped below 10m for the first time since May of 2021. My big takeaway? Services and hospitality had a significant decrease. I find this important because the sector has been driving “job growth” for the BLS report. So if that is moving down…then what’s that say about jobs?
ADP reported a miss on jobs. They had forecasted 200k and ADP reported 145k. But that is not the big number…continuing claims, reported each Thursday, turns out to be the head scratcher (so far this week).
Here are the weekly numbers. I’ve underlined two. The previous reported number of 1.689 million and the revised number up to 1.817 million. Holy cow! Then that ticked up to 1.823m. So the jobs people were losing earlier this year? We apparently are quietly telling everyone about it now. Well not today, Satan. I am screaming it! The fix has been in…but like everything, it shall be revealed. Shame on them.
What else is quietly happening? Check out this chart. The FED said they have been continuing to process QT (quantitative tightening) that they started last summer. This is a factor to the higher rates on top of raising their Fed Funds rate. But look at that spike in March! That has everything to do with the bank crisis…that’s not a crisis. It’s not? Huh. That doesn’t look good. And if they tighten again? Another bank crisis to spike this up again? They are full out of control now. You probably remember being out of control. It was probably as a teenager or a 20 something. They are the Fed. We are so screwed.
This one is also quiet…since no one holds the Executive Branch accountable. The horizontal yellow line is $72. In March, we broke below that…and now have spiked up. We spiked up because of a cut in production announced by OPEC. Why the concern about $72? See the next chart!!
This is the Strategic Petroleum Reverse. That dip in 2021? Biden. He used that to fight record oil prices for, in my opinion, politics…you know, mid-term elections? He said that when it hit $80 they would buy it back…and then changed that later to $72. Well, I don’t see an increase in the supply in this chart. Do you? Lies…or they don’t have any idea oil dropped below $72. How about this? Perhaps he pissed off OPEC enough that they cut production once the per barrel price dropped to where Biden would pay it? They don’t like him…and that drop in reserves is bad if we have to go fight a war for NATO in Europe…or us against China. And the other side of the planet knows this. Our government? Heads up their a$$es. Don’t like that? How would you like me to explain it? I see math here. It doesn’t lie. No, 2x2 is not 5.
Okay…Tim never leaves us with this sort of despair. Fine. I will be nice. Check out this drought monitor for the US. Yes, Kansas doesn’t look good. But hey, at least not a lot of food comes from here. Ugh. But look at the West?!?!?! CA, AZ, NV and UT coming out of a deep drought. Water for the Napa wines? That’s what I’m talking about!!! I like the stressed grapes best though.
10yr yield: Some of you have shared that you just look for the face on the chart. How’s this one? Yes…I am feeling good about this. That 3.367% line has been broken this week and continues to move below. First time we have closed below it since September. Next major level is around 3.10. If jobs are short tomorrow, we might make it there quickly. LFG. I know our mortgage region is ready!!
MBS: That red line drawn by me is a standard cup and handle diagram. That is a bullish signal. Higher MBS means lower rates. LFG!!! I’m floating into Jobs tomorrow…and I’m still forecasting lower rates this summer.
In finance, math prevails. You can’t hide things forever. Ask Worldcom if you don’t believe me. So it was only a matter of time until we got here. It will get going. If you need to buy a home, go shop quickly. If rates drop…people will flock to the low inventory. Other major concerns are out there, but I already don’t sleep enough for all of us. If you want to see how long you can stay up, don’t drink JOLT cola. Come sit with me and listen for a bit. Monsters don’t come in your dreams…they are already here.
Originating Branch Manager