As might be expected when you have a ‘blow-out’ new jobs number (over 500,000 new jobs) interest rates have taken a pretty big jump higher–up 12 basis points on the 10 year treasury yield to 3.52%. While in years past a 12 basis point move higher would likely send prices of income issues tumbling hard–that is not the case now.
Overall prices are generally red, but maybe only by 15 cents or so – on average. My accounts are negative, but only by maybe 1/5%. There are still buyers out there stepping in to make buys–keeping losses pretty minimal. I do note that the investment grade AIG-A 5.875% perpetual preferred is off $1.50/share in the last 2 days and now yielding 6.10%–I assume it is off based on the sacking of the CFO a couple days ago. This is a decent issue if one can get it here at $23.98 or so.
The employment number sets Jay Powell and the FOMC committee for another rate hike on March 22nd (the end of the next meeting). We will have substantially more data , including more employment numbers, by the time the next meeting rolls around but I think it is highly unlikely that the FOMC will be deterred from further hikes.
So on to the weekend–I am looking forward to it – mostly because the temperature will rise here in Minnesota to the 30’s–right now it is almost 1 p.m. and it is still -4 degrees – too cold for old people like me.
13 thoughts on “What a Blow Out Jobs Number!!”
I don’t give much credibility to these numbers. Markets are forward looking and reports are backward looking the smart money already made their move. Not to mention the manipulation and inaccuracy. If anything I wait for the dumb money to respond and then play the other side for the correction.
My first red day in 3 weeks. 😩
100% chance these numbers get revised downward.
Do notice the previous two were revised upwards. Where you equally sure of them?
Non-farm payrolls have been steadily declining for the past six months even with revisions, so the notion that the headline number would suddenly double in size absent a rational explanation should be taken with a grain of salt. 🤔
Its also worth noting that the outsized Jan 2022 non-farm payroll number of 504,000 got revised down to 364,000 (a 28% reduction) so there is recent precedent for a downward revision in the data. 🧐
Of course there could be another reason why the government would issue a glowing national jobs report right before the President addresses Congress on the State of the Union, but I can’t quite put my finger on what it is…😉
These are the same guys who required a government bailout back in what 2010 then still wanted to give bonuses to sales and sponsor a sales convention after the bail out until the government said no. Supplied insurance for CLO bonds based on mortgage loans in case of failure.
Got back into CLO’s in 2018 when they bought a company. Just yesterday announced selling 3.6 billion in CLO assets to Blackstone
Perhaps you meant the kiss-of-death CMOs, not CLOs? CLO debt was pretty safe in ’08 etc.
Your probably correct Gary. But AIG was just insuring them and when the sh_t hit the fan they defaulted on the insurance. Lot of retirement funds took a hit then.
Just reminds me that so many specialty finance companies and some banks seem to be back to playing the same games or a different version of them that they did 12 and 15 years ago. Some of the people involved then are still around, just started a new company or are in management at another.
Remember Countrywide ? those people didn’t just disappear or retire.
I am also skeptical. Apparently the gain was mostly the result of seasonal adjustment sleight of hand.
Seasonal adjustments are a real thing that happen every month, they’re not a sleight of hand. Just like there’s tons of seasonal hiring ahead of the holidays, there’s tons of seasonal workers being let go in Jan.
You must have better preferreds than me because I’m getting whacked
Pretty good. Figures
One can’t help but question the accuracy of such numbers in light of what was expected.
I question the accuracy of the folks ‘expecting’. Especially since they revised the last two upwards, and folks were screaming the originals were too high.