Listen Live
Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Listen Live
Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Jobs, Jobs, Jobs: We saw a pretty sizable increase in the number of announced corporate job cuts per the September Challenger Job Cuts report which moved from 20,485 in August to 29,989 in Sept. Initial Weekly Jobless Claims were higher than expected (219K vs. est. of 200K) but the prior week was revised lower to 190K. This brings the more closely watched 4 week moving average down to 206,500. Continuing Claims were 1.361M vs. est. of only 1.286M.
The Talking Fed: Today we hear from Kashkari, Evans, Waller, Mester and Cook. We also get their latest Balance Sheet at 4:30 pm.
Interest rates increased yesterday after the recent decline, this morning the 10 began unchanged at 3.76% and MBS prices after declining 27 bps yesterday started today unchanged. In pre-open futures trading the stock indexes were volatile, at one point the DJIA was down over 200 points but by 9 am ET and down just 88 points.
The only data today, weekly jobless claims at 8:30 am the estimates were for claims at 203K, as released claims increased 319K and up 29K from the prior week, the 4-week average at 206.5K essentially unchanged from the week prior at 206.25K.
Been a lot of talk and news recently that the Fed would begin cutting rates next year, as early as March. Seems no matter what Fed officials say traders continue that view. Eurodollar futures showed reduced expectations yesterday for Fed interest-rate cuts in 2023 but still price in around a one quarter-point move and at least two more in 2024. Federal Reserve Bank of San Francisco President Mary Daly and Fed Atlanta President Raphael Bostic were the latest to drive the point that the Fed presently does not expect any rate cuts in their outlook and tightening is in place to reduce inflation that remains near a four-decade high.
Although the idea of the Fed easing got ink last week when the stock indexes rallied hard, there is no reason to expect the Fed will, or should, back down. The only Fed dove we hear about is Chicago Fed Pres, Charles Evans, he has always been less aggressive and is the Lone Ranger at the Fed. Jerome Powell has insisted the lessons of the 1980s show the need to focus on inflation and not growth, investors refuse to believe he will remain steadfast in the face of a severe downturn. “We’ve been struggling with this idea that markets are pricing a fast pivot from the Fed next year,” said Christian Mueller-Glissmann, head of asset allocation research at Goldman Sachs Group Inc., who correctly warned that real yields would turn positive this year — bringing with them bear markets. “We see the Fed continue to hike into next year so it might be too early to expect long-dated real yields to peak on a sustained basis.”
