Market Snapshot October 5, 2018

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Good Friday A.M.,

 

The best thing I can say today is that it’s Friday. The bond market had a rough September and October isn’t starting off any better. This week has not been bond or rate friendly. There was a glimmer of hope before the jobs report that maybe we would see something to show inflation is weaker than expected but alas, it was not to be. The data points from the jobs report stacked up this way:

 

  • Nonfarm Payrolls for Sep: Actual 134K, Consensus 180K, Last 270K, Revised 201K.
  • Unemployment rate for Sep: Actual 3.7%, Consensus 3.8%, Last 3.9%.
  • Avg Earnings for Sep: Actual 0.3%, Consensus 0.3%, Last 0.3%, Revised 0.4%.
  • Trade Balance for Aug: Actual -$53.2B, Consensus -$53.5B, Last -$50.1B.

 

Bonds on sales again. The 10-yr is at 3.22% (wow) and mortgage bonds are off another 18bps.. Silver lining is we remain oversold so there is hope buyers will step in they just haven’t yet. Stocks/equities are not enjoying this week much either, the Dow is down 250 today and 600+ since Tuesday.

 

Interesting note on Tesla. Share price is $265 today, August 7th after Mr. Musk’s famous tweet about going private, it ran to $387. Almost 1/3 of its value gone in 60 days. To boot, 25% of its float (shares for sale) are being sold short. 25% is an unbelievable amount.. Microsoft or Amazon by comparison have just over 1% of their float in shorts. The markets are certainly telling Mr. Musk how they feel about the Tesla value proposition.

 

Enjoy the holiday weekend and first make today great!