Last week was quite an exercise on what financial markets care about and do not care about, although markets are partially concealed by a neutral mask. The biggest deal always is the monthly, first-Friday report of the job market in prior months. In theory, May was a downside miss, “only” 138,000 jobs added and a downward revision to April versus the consensus forecast of 185,000 and ADP’s monthly wild-swing estimate (ADP the payroll processor) of 253,000. Long-term interest rates fell a little on the unimpressive news; mortgages are again trying to cross below 4.00 percent, but all evidence suggests that the rate decline was already underway and is a separate story. The US 10-year T-note one year back. Note the up-trend last July to November as the Fed’s intentions settled in, which if extended through the election nonsense leads to yields right where we are today. When new data miss (up or down) in a key report, look elsewhere for confirmation. The numbers in the…
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