Friday, April 1, 2022

Daily Market Report 4/1/22  Today is the Big Jobs data by the  Bureau of Labor Statistics (BLS).  We'll start with the Average Workweek Hours, which shrunk by 0.1 to 34.6 hrs/week.  The Non Farm Payrolls for March came in a bit shy of it's forecast at 431k; however, it's still considered a strong number.  Also, It's February number was revised higher from 678k to 750k.  The Unemployment Rate dropped a little more than expected to 3.6%, which is also a strong number.  However, the Average Earnings for March is a double edge sword, as it rose 0.4%.  This is good because people are getting paid more.  This is bad because the higher pay creates higher inflation, as those costs get absorbed into the cost of goods/services.  When we're already experiencing high inflation, this does not help matters.  Meanwhile to other data, Construction Spending rose only 0.5% in February, which is shy of it's 1.0% forecast.  Lastly, the ISM Manufacturing PMI dipped by 1.5 to 57.1 in March, as manufacturing sector shrunk slightly as a whole in March.  Stocks are good with the Economic data, as the Jobs data were strong enough, so that the Fed shouldn't alter any future plans with their Policy moving forward.  However, MBS are currently Down about 23bps, but off from earlier lows (-40+ bps).  Pricing for Mortgage Rates worsened slightly from yesterday's close.  Yields rose to 2.38%, which is off from it's earlier highs (in the 2.46% range).  Also, we pointed out that the 10- and 2- Yields Curve did invert during overnite trading.  If prolonged, then it's an indicator of a recession coming, which will typically have a lag time.  The lag time is unknown.  My (personal) concern is that we go thru a Stagflation, as these inflationary pressures don't seem to be subsiding any time soon; and eventually the Economy will slow down.  But we may not see that until next year.  Stay  Tuned!

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