http://MikesDailyMarketReport.com: We have a lot of data to go over today; and tomorrow is the big jobs data from the Bureau of Labor Statistics. Without further adieu, let's start with the final revision of Labor Costs for Q4, which dropped from last month's 6.8% to 6.0%. This is good news for inflation! Also, Productivity for Q4 was better than last month's -4.8% to the final number of -4.2% (improvement by 0.6%). The Initial Jobless Claims rose from 730k (last week's number) to 745k this week. Durable Goods rose by 3.4% in January (unchanged from previous month); however, when you exclude Transportation, then it rose only 1.3% (down from it's 1.4% in December). Factory Orders continue to impress, as they rose 2.6% in January. Manufacturing and Factory work are the bulk of the economy at this time (even though, normally, the service industry provides the bulk of the jobs). Powells speech today is having a major impact with the Markets. The Fed Chair is not providing them with what they want, which is to extend "Twist". This is a way for the Fed to buy long-term debt and sell short-term debt, which allows for more liquidity in the short-term. The Fed has indicated that any current inflation is transitory due to the pandemic's effect on supply-chain; and economy show signs of improvement. Like the Stock Market, the Bond Market, or MBS, had started to selloff during Powell's Q&A. It has subsided some, but it's currently still down 9bps. Many Lenders had already started their reprices for the worse, so Mortgage Rates are a bit worse than yesterday's. Yields are skyrocketing again; and are just under 1.55% now.
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