Morning Report: Job openings fall

Vital Statistics:

 

Last Change
S&P futures 2890.5 8
Eurostoxx index 386.66 0.98
Oil (WTI) 64.39 0.06
10 year government bond yield 2.50%
30 year fixed rate mortgage 4.16%

 

Stocks are higher this morning on overseas strength after the ECB maintained interest rates. Bonds and MBS are up.

 

The Fed will release the minutes from its March meeting this afternoon at 2:00 pm. Given the magnitude of the shift in their Fed Funds forecasts, it should make interesting reading. There is a chance that it could be market-moving, especially since rates have moved back up.

 

Inflation at the consumer level rose 0.4% MOM in March, and increased 1.9% YOY. Ex-food and energy, it rose 0.1% MOM and increased 2.0% YOY. Energy prices are increasing again, so expect to see more upward pressure on prices. The 0.4% increase was the biggest in 14 months.

 

Job openings fell in February by about 500,000. Job openings had a big growth spurt in 2018 and now appear to be pulling back a little. Job openings fell in most sectors, with hotels and accomodation leading. Hiring fell in several sectors as well, including construction. The most important number – the quits rate – was stuck again at 2.3%. The quits rate is a leading indicator for wage growth, and is a number the Fed watches closely. Between the latest payroll numbers and this report, we can see evidence that the labor market is cooling a bit. That said, the number of job openings (7.1MM) are still larger than the number of unemployed (6.2MM).

 

JOLTs

 

The IMF cut its forecast for 2019 global growth from 3.5% to 3.3%, with the risks solidly to the downside. “The balance of risks remains skewed to the downside,” the IMF said. “Failure to resolve differences and a resulting increase in tariff barriers above and beyond what is incorporated into the forecast would lead to higher costs of imported intermediate and capital goods and higher final goods prices for consumers.”

 

Mortgage Applications decreased 5.6% last week as purchases rose 1% and refis fell 11%. “Mortgage rates inched back up last week, but remain substantially lower than they were in the second half of last year,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “As quickly as refinance activity increased in recent weeks, it backed down again in response to the rise in rates. However, this spring’s lower borrowing costs, coupled with the strong job market, continue to push purchase application volume much higher. Purchase applications are now up more than 13 percent compared to last year at this time.”  Government loans (FHA / VA) increased their share of the market, and the average contract interest rate rose 4 basis points to 4.4%.

 

The CEOs of major banks head to the House for what promised to be a tongue-lashing from Democrats. Bank of America attempted to head off criticism by raising the minimum wage for its employees. There will almost certainly be kvetching about CEO pay, and the financial system will almost certainly be Enemy #1 for the Democrats running in 2020.

14 Responses

  1. NoVA – Thanks for the heads up on the slow processing of IRS refunds this year. I’m in the same boat as you, massively over withheld in the estimated quarterly payments but rather than have to cut a check for my 2019 Q1 while still waiting for my 2018 refund, I just applied most of my 2018 refund to it so it was a wash. As a side note, paying off my mortgage last year meant that for the first time since my 20’s the standard deduction was a better choice for me.

    PL ignorance never ceases to amaze me though.

    Liked by 1 person

    • it’s really something.

      I typically do the same and apply the refund the next year, but wanted to clear out some debt.

      i’ve got 13 years left on the mortgage but want to finish that off in 10.

      Like

  2. If this starts a trend on entry level workers, Democrats are going to have a real problem beating Trump.

    https://www.vox.com/2019/4/10/18301931/bank-of-america-starting-salary-pay-raise

    Liked by 1 person

  3. He keeps giving me reasons to support him:

    “If Trump has his way, this major federal agency is on the way out

    By Lisa Rein and Damian Paletta
    April 10 at 9:46 AM

    The White House is moving to do what no president has accomplished since World War II: eliminate a major federal agency.

    If the Trump administration succeeds at dismantling the Office of Personnel Management, the closure could be a blueprint for shuttering other departments as it tries to shrink government.

    The agency would be pulled apart and its functions divided among three other departments. An executive order directing parts of the transition by the fall is in the final stages of review, administration officials said, with an announcement by President Trump likely by summer. OPM employees were briefed at a meeting in March.”

    https://www.washingtonpost.com/politics/if-trump-has-his-way-this-major-federal-agency-is-on-the-way-out/2019/04/09/935e2dfe-54c0-11e9-9136-f8e636f1f6df_story.html

    Liked by 1 person

  4. This will be interesting, especially if it turns out that the FBI lied on the FISA application:

    “Justice Dept. Watchdog’s Review of Russia Inquiry Is Nearly Done, Barr Says

    By Adam Goldman and Charlie Savage
    April 9, 2019

    WASHINGTON — The Justice Department’s internal watchdog intends to complete by May or June his investigation into aspects of the Russia inquiry, including whether law enforcement officials abused their powers in surveilling a former Trump campaign aide, Attorney General William P. Barr told lawmakers on Tuesday.

    The department’s inspector general, Michael E. Horowitz, has been examining how law enforcement officials obtained a warrant in October 2016 to wiretap Carter Page, a former foreign policy adviser to the Trump campaign with links to Russia. Mr. Horowitz’s investigators have also asked witnesses about informants that the F.B.I. turned to in the early stages of the investigation, according to people familiar with his inquiry.

    “The office of the inspector general has a pending investigation of the FISA process in the Russia investigation,” Mr. Barr said in testimony before a House appropriations subcommittee, using shorthand for the Foreign Intelligence Surveillance Act. “I expect that will be complete in probably May or June, I am told. So hopefully we’ll have some answers from Inspector General Horowitz on the issue of the FISA warrants.””

    https://www.nytimes.com/2019/04/09/us/politics/russia-investigation-barr.html

    Like

  5. I could cut diamonds right now!

    https://news.yahoo.com/flight-shame-swedes-rethinking-air-travel-032414475.html

    Climate change, ridding this country of filthy scandies, one Celsius degree at a time!

    Liked by 1 person

  6. KosKidz no longer love Julian Assange (though,in fairness they stopped loving him after Bradeley Manning leak because it hurt Hillary).

    https://www.dailykos.com/stories/2019/4/11/1849446/-Julian-Assange-arrested-in-London?utm_campaign=trending

    Like

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