It's another JOBS Day in 'merica. We'll start with new record highs for S&P and Nasdaq as investors cheer central bankers who sound determined to cut rates this year. The 2Y is ~4.50% and the 10Y is ~4.09% ahead of jobs.
As for the jobs report, the consensus is for a headline number of ~200K with the unemployment rate remaining at 3.7%. The Average Hourly Earnings number might get additional scrutiny after yesterday's BLS data on productivity and unit labor cost data showed YoY compensation per hour at 5.1% (see page 6). Whatever happens, blame the weather as GS research reports that nationwide snowfall declined substantially in February which might have caused an uptick in construction and leisure jobs.
Yesterday, as expected the ECB kept their key interest rates unchanged at 4.5, 4.75 and 4% for the main refinancing, marginal lending facility, deposit facilities respectively. The ECB did revise down their inflation projections and expect to get to target inflation in 2025 (on a headline basis) while characterizing the growth in wages as 'strong'. I guess we'll see if inflation falls as quickly as now forecast by the ECB, if it does it sounds like they'll be cutting by June.
In Fed land, probably the most memorable thing about Powell's testimony will be the questioning from John Kennedy of Louisiana around the allegations of sexual misconduct by bank examiners (see around 4:30 mark). I get that the ultimate line of questioning had to do with the Basel III endgame in some way, but I'm just not sure what the FDIC has to do with Powell. Unfortunately or fortunately, social media has had their fun with this exchange and it will now be the only thing most people remember from this testimony.
The SOTU was about as expected based on pre speech media reports, with Biden taking an opportunity early in the speech to paint Trump as a threat to democracy at home and abroad. Record job growth featured prominently and there was a soft landing reference in the speech.
XTOD: Did u guys see that bro's expression in the back? https://pbs.twimg.com/media/GIFPvMtbsAUHMoS?format=jpg&name=medium
XTOD: Powell: "Interest rates right now are well into restrictive territory. They’re well above neutral."
"We're far from neutral now."
XTOD: Oaktree’s Howard Marks says many companies are still "swimming naked" with debt maturities yet to hit. “The tide hasn’t gone out.”
XTOD: Goldman Trader: Back In 2000 Everyone Thought The Internet Would Run On Cisco Routers At 50% Margins... Until They Didn't
https://x.com/GONOGO_Korea/status/1765780293234176407?s=20
https://x.com/NickTimiraos/status/1765775792896606566?s=20
https://x.com/lisaabramowicz1/status/1765766502035202396?s=20
https://x.com/zerohedge/status/1765502651381272865?s=20
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