Today in History-September 6

1997 – At the funeral of Diana, Princess of Wales, Elton John—a man not given to understatement—gave a tear-jerking performance of “Candle in the Wind,” his 1973 Marilyn Monroe tribute rewritten in honor of the deceased princess.

It is safe to say that Westminster Abbey had never seen a performance quite like the one Elton John gave on this day in 1997. But then Westminster Abbey had never seen a royal funeral quite like Diana’s, what with her brother, Earl Spencer, openly criticizing the royal family for mistreating her while television cameras beamed a live feed to the hundreds of thousands of mourners gathered directly outside and the millions more watching on television around the world. But it was Elton John’s performance, seated alone at a grand piano, which stole the show.

1901 – President William McKinley is shaking hands at the Pan-American Exhibition in Buffalo, New York, when a 28-year-old anarchist named Leon Czolgosz approaches him and fires two shots into his chest. The president rose slightly on his toes before collapsing forward, saying “be careful how you tell my wife.”

Czolgosz moved over the president with the intent of firing a third shot, but was wrestled to the ground by McKinley’s bodyguards. McKinley, still conscious, told the guards not to hurt his assailant. Other presidential attendants rushed McKinley to the hospital where they found two bullet wounds: one bullet had superficially punctured his sternum and the other had dangerously entered his abdomen. He was rushed into surgery and seemed to be on the mend by September 12. Later that day, however, the president’s condition worsened rapidly and, on September 14, McKinley died from gangrene that had gone undetected in the internal wound. Vice President Theodore Roosevelt was immediately sworn in as president.

1781 – British Brigadier General Benedict Arnold, a former Patriot officer already infamous and much maligned for betraying the United States the previous year, adds to his notoriety by ordering his British command to burn New London, Connecticut.

The Continental Army had been using New London to store a large stash of military supplies, but only stationed Captain Adam Sharpley and a contingent of 24 Continental soldiers there to protect it. General Arnold’s British soldiers, with help from the area’s Loyalists, quickly overwhelmed Captain Sharpley and the Continentals, who had no other option but to retreat and leave New London and the military supplies unguarded.

After looting the town, Arnold ordered his British soldiers to set fire to every building, causing the equivalent of more than $500,000 in damages. Benedict Arnold was already despised throughout the colonies for his attempt to sell the Patriot fort at West Point, New York, to the British in 1780 for a bribe of £20,000. The burning of New London sealed his reputation as a public enemy and his name became a synonym in common American parlance for “traitor.”

Morning Report – Jobs day

Vital Statistics:

Last Change Percent
S&P Futures 1659.7 6.7 0.41%
Eurostoxx Index 2779.6 5.4 0.19%
Oil (WTI) 109.1 0.7 0.66%
LIBOR 0.256 -0.002 -0.66%
US Dollar Index (DXY) 82.13 -0.499 -0.60%
10 Year Govt Bond Yield 2.89% -0.10%
Current Coupon Ginnie Mae TBA 103 0.7
Current Coupon Fannie Mae TBA 102.6 1.0
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.67
Stocks and bonds are higher after a disappointing jobs report. Bond investors were clearly leaning short in a big way going into the report. The 10 year was trading above 3% before the report, but has moved back down to 2.89%
The jobs report was relatively weak, although the headline unemployment number dropped to 7.3% from 7.4%. Payrolls increased 169k, lower than the 180k the Street was looking for. The prior two months were revised down by a total of 74k. The unemployment rate dropped from 7.4% to 7.3%, while the labor force participation rate dropped to 63.2% from 63.4%. For those keeping score at home, the last time the labor force participation rate was that low, “Miss You” by the Rolling Stones was the #1 song on the hit parade. Weekly earnings rose .2% while weekly hours ticked up by 6 minutes. Overall, a disappointing report.
Where does this report leave us with tapering QE? Since the default path is to start tapering, and some of the other reports are showing strength, I would expect the Fed to make at least a symbolic decrease in purchases, probably in Treasuries and not MBS.