Market Snapshot July 9, 2019

hot weather balloons

Good Tuesday AM,

 

Bonds are off again this morning as the 10-year yield snuck back up to 2.06%. This is really more of a sideways trading than anything else. The news today was bond friendly but not significant to the market. Fed speakers at various events today include Chair Powell, Vice Chair Quarles and Atlanta President Bostic. Powell will speak before the House Financial Services Committee Wednesday and the Senate Banking Committee on Thursday (tomorrow is really what markets are waiting for). The Fed is in a pickle, while their dual mandate of full employment and 2% inflation does not include boosting the equity market, it is clear that stocks will fall if the Fed does not drop rates. I still expect a rate drop at the end of July.

 

Additional insight from Elliott Eisenberg is on point. June’s strong 224,000 net new jobs were a huge relief after May’s weak showing and tariff traumas. That said, YTD job growth is 171,000/month, over the last 12 months it’s 192,000/month, in CY2018 it was 223,000/month; we’re slowing. Wage growth is steady at 3.1% Y-o-Y; no inflationary concerns! A half-point cut by the Fed later this month is history. A quarter-point cut is likely, primarily due to the strengthening dollar.

 

And good news for the real estate community, maybe the flat fee model is not the answer. After building a successful business in the United Kingdom with its flat-fee real estate model, Purplebricks set its sights on finding similar success in the United States, but now, less than two years later, Purplebricks’ U.S. dream is dead. Purplebricks announced Monday that it is shuttering its U.S. business, and will instead focus on growing its business in the U.K. and Canada.

 

Make today great!