Morning Report: Disappointing jobs report

Vital Statistics:

S&P futures36738.6
Oil (WTI)45.87-0.21
10 year government bond yield 0.95%
30 year fixed rate mortgage 2.78%

Stocks are higher this morning on stimulus hopes. Bonds and MBS are down.

The jobs report showed the economy added 245,000 jobs last month, which was well below expectations of 500,000 jobs. The unemployment rate ticked down to 6.7%. The labor force participation rate fell to 61.5% as 400k workers left the workforce. Average hourly earnings increased 4.4%. The jobs report can only be looked at disappointing, and the payroll number is getting a seasonal boost from temporary holiday hiring. The only bright spot is wage growth, however even that is probably due to lower paid service employees fallout, which boosts the overall average.

The ISM Services Index came in right about in line with expectations. Business activity and new orders are growing, however the rate is decelerating. Employment is improving, and the trend seems to be for a further acceleration.

A stimulus bill is in reach for this year, according to Mitch McConnell and Nancy Pelosi. It will probably be around $900 billion, which is much less than the pre-election talk of a “skinny” $2 trillion bill.


Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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