friday wrap

market vibes

January 10… )

"I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered together at the White House, with the possible exception of when Thomas Jefferson dined alone." JFK April 29, 1962 honoring winners of the Nobel Prize.

Jay Powell’s refrain, “We’re in a good place,” collapsed like a rock in a wet paper bag this morning. Despite ADP being soft at 122 vs. 140 on Wednesday, NFP blew the top off with 256k vs. 165, Average Hourly Earnings at 4% vs. 3.9%, and headline UE at 4.1% vs. 4.2%. Five-year notes, 10-year notes, and 30-year bonds made new contract lows on the prints. At 10:00 AM, U. Mich inflation data came in hot.

At a point, the trend in long bonds and the curve become so recessionary, denial becomes a narrative in itself. Inflation is not under control here, in Europe, or in Japan. And deflation is not under control in China. Central banks may be a community of well-spoken and sagacious men and women, but they are losing money faster than a rookie potato trader in a room full of sharks.

The fires in LA, the sentencing of Trump for vanity and spite, and some good old-fashioned capitulation in metals and oil made this one of the better trading days in months. Ranges were wide and thick across the board, directional, and correlated in ways that may imply the beginning of trends for Q1, if not further forward in time.

Quite a day … let’s begin.