Good Tuesday AM,

Today we got the JOLTs (job opening) report. So much stronger than expected.

I doubt the data is accurate (it is aggregated by state and with remote work, one job can show up in lots of states and be counted several times). None the less, the news hit hard. Stocks are tanking and bonds are drowning. The 10-yr note is at an unbelievable 4.79%. and this is after the Fed members are in almost unison saying no more hikes. Markets are demanding more yield and right now, seem to be driving the Fed. Tough to find a reason to float.

This was a good piece from Bloomberg…

It’s Jobs Week. And as a little appetizer before this Friday’s release, today we get the JOLTS report.
Total Job Openings and The Quit Rate have become top-shelf data in this era of trying to gauge so-called labor imbalances. So those looking for a soft landing will be looking for these lines to continue trending down.

Totally separately, another chart that’s interesting to me is wholesale gasoline futures. There’s been a lot of talk about the rebound in crude prices over the last few months. There’s been less talk about the fall in whole gasoline price futures recently, as refiner margins (so-called crack spreads) have collapsed. Expect retail gasoline prices to follow wholesale down. And if gasoline prices are an important determinant of consumer sentiment (as they seem to be) then this is probably good news on that front.

And finally here’s an interesting chart that I saw in this article about the Treasury selloff and mounting fears over the size of the deficit. There’s been a breakdown in the relationship between the 10-year Treasury yield (yellow) and ratio of copper to gold (white lines). For years they kind of moved together, with the intuition being that rates were moving for cyclical reasons. When rates would rise, it would correspond with bidding for an industrial metal over a precious metal and vice versa. The fear is that with rates rising, despite the lack of copper bidding, that there’s some other factor driving rates (like booming supply of Treasuries) that’s causing the move.

Of course there could be other factors, including copper’s fading role as a cyclical indicator. Nonetheless it’s interesting what longstanding chart patterns start to change.

Please remain safe and healthy, and make today great!