Morning Report: Jobs and the Fed Funds futures

Vital Statistics:

 

Last Change
S&P futures 2675 -16
Eurostoxx index 374 3.73
Oil (WTI) 51.4 -0.09
10 year government bond yield 2.89%
30 year fixed rate mortgage 4.66%

 

Stocks are lower this morning after yesterday’s wild ride in the stock and bond markets. Bonds and MBS are flat.

 

Jobs report data dump:

  • Nonfarm payrolls + 155,000
  • Unemployment rate 3.7%
  • Labor force participation rate 62.9%
  • Average hourly earnings up 0.2% / 3.1%

This was generally a weaker-than-expected jobs report, with payrolls coming in below the 190,000k estimate and average hourly earnings about 1/10% below estimates. It probably won’t make that much of a difference to the Fed, but it does show the economy is moderating a bit from the torrid pace of mid-year.

 

The Fed Funds futures are beginning to cheat to the side of less movement from the Fed. While the December futures are still predicting a hike, the June futures are now predicting that the Fed might hike only one more time.

 

fed funds futures

 

Nonfarm productivity rose 2.3% last quarter, while employment costs rose 0.9%. Real compensation grew at 1.1%, which is disappointing, but overall the report is decent. This report does demonstrate the issue that has been bedeviling the Fed: if we are at full employment, wages should be heading higher and the central bank should get ahead of that. However, wages are behaving as if we are not at full employment. So which numbers are telling the truth? IMO, we are not at full employment yet. While there are worker shortages in some areas, there is a glut in other areas. Also the financial crisis kicked out a lot of workers who were in their prime earnings years, and that is depressing the numbers.

 

Kathy Kraninger has been confirmed by the Senate to be the next head of the CFPB. She will serve a 5 year term. The vote fell along party lines, with Republicans looking for her to reform the agency’s anti-business tilt, while Democrats ululated that she won’t be tough enough on the industry. While nobody knows exactly what she has in mind, the CFPB has been going in the direction of more transparency about what the rules of the road are.

 

Loan Depot CEO Anthony Hsieh sent an email to his loan officers to stop whining. “I am honored to be your CEO and happy to work very hard for you. But the 42% that are unhappy being here, I do not want to work this hard for those that don’t want to be here. Adjust your attitude, be ALL-IN,” the alleged email states.  “Stop acting entitled and understand this industry has ups and downs, but all will average out great. Be confident and stop whining” Definitely a different approach to motivating people.

13 Responses

  1. Interesting interview snippet:

    Like

    • I can’t believe she gets bent out of shape over this statement: “I think we love to make big deals out of things that aren’t necessarily big deals, because we can”

      If that doesn’t describe the SJW left to a T, I don’t know what does…

      Liked by 1 person

    • Stepping down from the Oscars may be punishment for Hart, but that censure doesn’t do very much to help people who have, for example, been beaten by relatives because of their perceived sexual orientation.

      WTF does one thing have to do with another?

      Like

  2. I guess the gameplan is to Alinksy any team that wants to draft him… Of course the next step is go after anyone who drafts him for their fantasy team..

    https://www.usatoday.com/story/sports/ncaaf/2018/12/08/kyler-murray-heisman-winners-old-homophobic-tweets-resurfaced/2255806002/

    Like

    • I wonder who is running this Twitter / SM language policing strategy. Would be great to get some names…

      Create a database of these people and sell it to companies so they know not to hire a walking lawsuit…

      Like

    • When Murray was 15 years old, he tweeted at his friends (via his since-verified Twitter account) using an anti-gay slur to defame them.

      Why are these things taken seriously? This is trolling and nonsense. He was fifteen.

      “When John Doe was 11, it is rumored he called an associate ‘a fag’ for not letting him play his new copy of Madden NFL on his Playstation. He has since apologized for his insensitivity, not to his stupid friend who everybody agrees is lame, but to the gay community for ever associating them with his super-lame friend.”

      Like

      • As ESPN and USA Today wonder why #SJWsports doesn’t sell..

        That is the part I don’t get. Anyone with a modicum of analytical skills can see that the strategy is not working, they are losing subs and audiences hand over fist.

        Yet they clearly do not care. Since when is social engineering more important than shareholder wealth maximization? What does the SJW left hold over companies like Disney and Gannett? I still wonder why huge companies publish ads that alienate half their market in order to suck up to the SJW left? It is completely perplexing.

        Like

        • I think it’s a closed loop, the advisors doing so are surrounded by those screaming it should be done, there are no alternative sources of information for them.

          Like

        • Numbers are numbers. The NBA has thrown millions at the WNBA, which hemmorages money.

          Any sane businessman would have thrown in the towel years ago. Yet they persist. Someone / something is forcing them to.

          Like

        • I’d posit that for the owners it isn’t so much a business as a hobby, therefore one is more indulgent.

          Also, let’s not forget how lefty rich people have become, especially the super rich.

          Like

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