Morning Report: Decent jobs report 3/10/17

Posted on March 10, 2017 by Brent Nyitray

Vital Statistics:

Last Change
S&P Futures 2378.0 11.8
Eurostoxx Index 374.8 1.9
Oil (WTI) 49.9 0.6
US dollar index 91.9  
10 Year Govt Bond Yield 2.60%
Current Coupon Fannie Mae TBA 101.438
Current Coupon Ginnie Mae TBA 102.784
30 Year Fixed Rate Mortgage 4.21

Stocks are higher this morning after a strong jobs report. Bonds and MBS are up small.

Jobs report data dump:

  • Payrolls up 235k vs 200k expected
  • unemployment rate 4.7%
  • labor force participation rate 63%
  • average hourly earnings up 0.2% MOM, up 2.8% YOY

Overall a decent report. Didn’t match the ADP number on payrolls, but ADP generally correlates with the revised BLS report, not the first one. Looks like the Fed is going to hike next week. Note another big increase in construction employment, to 58k, which is the highest since 2007. Bonds had already sold off on the strong ADP number, so they are recouping some of those losses today.

Donald Trump met with community bankers yesterday and promised to ease the regulatory burden the state has imposed on them. There has generally been bipartisan agreement that the regulatory burden on small banks has been too heavy, and that it is inhibiting credit to small business.

Goldman is out with a call this morning forecasting that the Fed will hike 3x this year: March, June, and September. They expect the Fed to end their reinvestment of maturing assets in the fourth quarter this year. The end of reinvestment shouldn’t have a major effect on mortgage rates, since spreads were largely insensitive to QE in the first place.

The Fed funds futures are now forecasting a 50% chance of a June rate hike, up from about 20% a couple weeks ago.

Household net worth increased to record levels in the fourth quarter, according to the Federal Reserve. The ratio of net worth to disposable income hit 6.5x, which matches bubble-era highs.

Filed under: Economy, Morning Report |

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21 Responses

  2. Brent Nyitray, on March 10, 2017 at 11:27 am said:

    When life gives you lemons….

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  3. jnc4p, on March 10, 2017 at 2:02 pm said:

    Good David Brooks piece:

    Like

    Reply
  4. jnc4p, on March 10, 2017 at 2:24 pm said:

    They are setting themselves up for a backlash:

    “San Francisco Police Department pulls out of FBI anti-terrorism task force

    By Ellen Nakashima
    March 10 at 12:47 PM”

    https://www.washingtonpost.com/world/national-security/san-francisco-police-department-pulls-out-of-fbi-anti-terrorism-task-force/2017/03/10/62e05bcc-fd09-11e6-8f41-ea6ed597e4ca_story.html

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  8. Let the mutherfuker burn!, on March 11, 2017 at 12:57 pm said:

    Prolly the best breakdown of The Video.

    View at Medium.com

    I still think the baby coming in under their own power and volition is the best, funniest moment.

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  10. Let the mutherfuker burn!, on March 11, 2017 at 6:48 pm said:

    ” I’ve never encountered anything like this. I think it has a lot to do with this fact-free world where things can mean whatever you want them to mean.”

    It’s called Post-Modernism. Who’s responsible that I wonder?

    http://www.hollywoodreporter.com/news/sxsw-cnns-jake-tapper-says-his-son-has-adapted-fake-news-line-trump-985318

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  12. Brent Nyitray, on March 12, 2017 at 11:36 am said:

    I suspect the MSM wouldn’t be getting the vapors over this if hillary won

    http://thehill.com/policy/international/323582-kremlin-spokesman-russian-ambassador-met-with-advisers-to-clinton

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  13. Let the mutherfuker burn!, on March 12, 2017 at 7:16 pm said:

    I laughed.

    Before Trump gets too comfortable, he should know that counter-intelligence probes can change as new evidence comes to light. He also damaged his own standing as president by tweeting such a serious charge with no supporting evidence.

    https://www.bloomberg.com/view/articles/2017-03-09/trump-s-run-of-dumb-luck

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    • ScottC, on March 13, 2017 at 7:05 am said:

      The Wise Latina is bummed that people think judges are political…

      I think that progressives truly believe that there is a difference between being political and implementing progressive values. When they impose progressive policy, they aren’t being “political”, they are doing what is “right”.

      Progressives are a strange breed.

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