Good Thursday AM from your Hometown Lender,
Job cuts from Challenger Gray & Christmas for February kicked off today’s U.S. economic calendar: U.S.-based employers announced 172,017 job cuts in February, the highest total for the month since 2009 and the highest monthly total since July 2020. We’ve also received weekly jobless claims; 221k, lower than expected; 1.897 million continuing claims, higher than expected. The January trade deficit plunged to $131.4 billion as countries stocked up ahead of Trump, and productivity and unit labor costs both beat estimates. Markets will also hear remarks from Philadelphia Fed President Harker, Fed Governor Waller, and Atlanta Fed President Bostic.
The ECB was out with its latest monetary policy decision:
Another 25-basis point cut to 2.50 percent followed by ECB president Lagarde’s press conference where she cited week forecasts on trade. I am sure between the lines; additional military spending is also on her mind. Despite cutting rates, the Euro has strengthened against the dollar and is up 3+% just in the past week, as President Trump wants making US goods more competitive globally.
Tomorrow brings the biggest economic report of the month, the BLS Jobs report. Markets are expecting 150k new jobs. If more jobs were created, rates will worsen. I do not recommend floating into that report.
Tariffs are all over the news again.
The 10% tariff on Canada and Mexico has been delayed until April 2nd for USMCA compliant goods (roughly 50% of all goods imported from Canada and Mexico including Textiles, Apparel and Automotive). Tariffs are continuing to put a hurt on equities. Bonds are also taking it on the chin for the last two days.
Why though, typically money would flow into bonds if it were leaving stocks?
One reason is we are in a global market and Germany which is the number one economy in Europe and number three globally is going on a spending increase and is for the first time, willing to run a deficit. WHAT? German bonds prices are falling pushing rates up due to the country’s incoming chancellor announcing a spending plan that breaks with the nation’s long-held doctrine of low borrowing. The plan includes a 500 billion euro infrastructure plan and defense spending, which are shifting the market and causing a bond market selloff. Why would people invest in US Bonds if they can get a better trade on German Bonds. As German yields increase, so will US.
Good intel…
The National Association of Realtors (NAR) pored through its research dating back to 1981, and found that among all homebuyers then, 73% were married couples, 11% were single women, and 10% were single men. Now, according to the organization’s latest data in its report, “2024 Profile of Home Buyers and Sellers,” 62% of all homebuyers are married couples, 20% are single women, and just 8% are single men.
Stay safe and make today great!