Four more years.
Four more years of broken promises. Four more years of watching the same mistakes being made over and over. Four more years of hoping things will be different, only to have those hopes dashed against the rocks of reality. Four more years of explaining to my kids why I keep putting my faith in someone who continuously lets me down.
Four more years of watching the person in charge make the same decisions that got us here in the first place, while telling us this time will be different. Four more years of watching them get outmaneuvered by the competition when it matters most. Four more years of settling for "good enough”.
Four more years of having to defend my choice to friends and family who just don't understand why I keep doing this to myself. Four more years of self-loathing. Of wondering why I let this stranger control my emotions.
Two 1st and goals from inside the 5 yard line and 0 points to show for it. A pick 6 wasted. Another loss to Ohio State (9 in 10 years), another year of "almost", another round of "we're close" press conferences. And thanks to a buyout clause that would make a Wall Street CEO blush, we're locked into four more years until it drops to "just" $24 million.
At least with the presidential election, we get a chance to change course every four years. Penn State fans? We're stuck in our own personal groundhog hell until 2028.
Maybe Michigan was onto something with stealing signals. At least they had a plan to beat Ohio State that didn’t involve running up the middle over and over again...
Last Week This Morning·
- 10T: 4.39%
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- German Bund: 2.41%
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- 2T: 4.21%
- SOFR: 4.90%
- Term SOFR: 4.65%
- JOLTs Job Openings: 7.44mm vs 7.99mm expected
- GDP: 2.8% vs 2.9% expected
- GDP Price Index: 1.8% vs 1.9% expected
- PCE Inflation Data:
- Core PCE m/m: 0.3% vs 0.3% expected
- Core PCE y/y: 2.7% vs 2.6% expected
- NFP 12k vs 100k expected
- Unemployment Rate: 4.1% as expected
- Buffett going max long cash doesn’t have anyone else worried?
- If you aren’t watching The Penguin, you’re doing yourself a disservice
“Gaslighting doesn't exist. You made it up because you’re crazy.” – Rick and Morty
Somehow, a jobs report that came in at just 12k managed to push the 10yr Treasury up to 4.385%. What in the entire f&#k.
While it’s fair to note that the Boeing strike (33k) and the first hurricane impacted these numbers, it’s still a historically bad number. By now we should now the 12k will be revised lower, right? Let’s just pretend the eventual downward revision will offset those drags and assume the 12k is legit. A 12k NFP is incredibly weak. Ignoring the wild swings during covid, there’s been exactly one print this bad since the GFC – February 2019 (5k).
Do you remember when the Saints started the second half of the Super Bowl with an onside kick against the Colts? That was the last time NFP consistently came in this weak.
When the allegedly strong report of 254k came out a month ago, I was stunned markets fell for it again. Am I being gaslit? Ten out of the last twelve job reports have been revised lower, what are we talking about here? Charles Payne put together this helpful guide going back to January 2023. Why do we keep forgetting this?
While the establishment survey (NFP) showed a gain of 12k jobs, the household survey (UR) showed a massive loss of 368k jobs. If we look at private sector workers specifically, the household survey showed a drop of 102k.
The jobs report is giving me flashbacks to me screaming into the TV on Saturday, “Stop running it up the middle!”
Healthcare and government made up 90k of the 12k. That’s right, we needed federally subsidized jobs to offset losses to arrive at a positive number.
Other thoughts:
- The last two months were revised lower by 112k (and August wasn't impacted by hurricanes or strikes)
- Private payrolls fell by 28k
- The headline unemployment rate of 4.1% was actually 4.145% - if Penn State had fired Franklin we’d be at 4.2%
- Professional services employment is down six of the last seven months
- The breadth of job gains keeps falling, approaching that critical 50 threshold that typically signals recession
- Full time employment is negative
- Involuntary part-time work is climbing
- Only one of the hurricanes showed up in the data. The second hurricane will show up next month.
I’m really interested in hearing your thoughts on why the Fed shouldn’t be cutting because the UR is at 4.1%. You probably drive by looking in the rearview mirror, too…
Rates
Markets have a 98% probability of a Fed cut this week and an 83% probability of another cut in December. The jobs data makes it pretty clear why - the Fed's rate hikes are finally showing up in the labor data. Just like my expectations for Penn State football, the labor market isn't nearly as strong as the headlines suggest.
I have no clue what to expect out of the T10, it seems detached from reality. Bloomberg Rates put out an interesting research piece that suggests about half of the spike in T10 yields is attributable to a Trump win being priced in by markets.
Does that mean a Harris victory would lead to a drop of 30bps+?
The Week Ahead
An election and a Fed meeting…should be pretty calm.
Say what you will about Hillary, but at least she made a concession speech.
