Morning Report: Bill Gross says 100% chance of a hike in December 11/9/15

Stocks are down this morning as investors digest the jobs report. Bonds and MBS are down.

The Labor Market Conditions Index improved to 1.6 in October from an upward-revised 1.3 in September.

The week after the jobs report is usually pretty data-light, and this week is no exception. Aside from the JOLTS job openings on Thursday and retail sales on Friday, there simply isn’t much market-moving data.

Luxury builder Toll Brothers announced preliminary numbers for the 4th quarter and full year. Revenues came in at $1.44 billion, a touch higher than the Street estimates. This was up 6% in dollars and 1% in units. Average selling prices rose 5.8% to $790,000. Signed contracts rose 29% in dollars and 12% in units. Backlog is up 29% in dollars and 10% in units. We will hear from D.R. Horton tomorrow. Although we are in the dull season for the builders, it looks like they are thinking of ramping up production. In the jobs report, construction jobs increased from 33k in September to 78k in October.

The OECD took down its forecast for global growth in 2016 from 3.6% to 3.3%. A deterioration in the Brazilian and Russian economies drove the downgrade. Japan’s forecast from from 1.2% to 1%. The Eurozone was taken down from 1.1% to 1%. The US economy is forecast to grow 2.6%.

In light of those forecasts, should the Fed hold off on raising rates until things are more clear? Many would argue that ZIRP is an emergency measure and we are no longer in an emergency. Bank of America lays out the argument that the economy can withstand an increase in rates.

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