Morning Report – Jobs day 03/08/13

Posted on March 8, 2013 by Brent Nyitray

Vital Statistics:

 

Last

Change

Percent

S&P Futures 

1547.8

3.4

0.18%

Eurostoxx Index

2744.5

42.6

1.40%

Oil (WTI)

91.3

-0.2

-0.27%

LIBOR

0.281

0.001

0.36%

US Dollar Index (DXY)

82.41

-0.045

-0.05%

10 Year Govt Bond Yield

2.06%

0.05%

 

RPX Composite Real Estate Index

194.9

-0.3

 

 

Markets are higher this morning after a positive jobs report. Payrolls increased by 236k in Feb, higher than the 165k forecast. January was revised down. The unemployment rate fell to 7.7% from 7.9%, however the labor force participation rate fell as well, which means that number isn’t as great as it initially appears.  Bonds are getting clocked, with the 10-year solidly above 2% again. MBS are down as well.

The rally in the stock market and rebounding house prices has returned US wealth to its pre-crash levels. Of course the main driver has been the stock market, not real estate, so don’t expect this to get us back to pre-crisis levels of consumer spending.  Still, its a start.

The Fed has released the results of its stress tests for the banks. The stress test is a scenario of 12.1% unemployment, a 50% drop in the stock market, and a 20% drop in real estate.  They predict that Tier I capital would fall from 11.1% to 7.7%, which is still above minimum standards.  

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