Good Tuesday Am,

I hope you had a terrific holiday.

Bonds finally showing some signs of life today.

Maybe it was the break through on the debt ceiling negotiations over the weekend, maybe traders are just recognizing they have pushed too far and are buying back some bonds. This will be an important news week with the jobs report rounding it out on Friday. There are two great slides below which I think share the challenges in the bond market. The first is sobering. This year is the worst return on the 10-yr Treasury since 1788 (yes 1788).

The second slide shows that government bonds have never (never) been as shorted as they are currently.

Both of these are going to turn and when they do, we will see an enormous rally and rates will drop substantially.

Here is what’s on the schedule for this week.

Wednesday
The Labor Department releases the job openings and labor turnover survey. Economists estimate there were 9.5 million unfilled positions on the last business day of April, down from 9.6 million in March.
Thursday
ADP releases its National Employment Report for May. Economists expect 180,000 new private sector jobs, following a 296,000 increase in April.
The Institute for Supply Management releases its manufacturing purchasing managers’ Index for May. The consensus estimate is for a 47.0 reading, down from April’s 47.1.
Friday
The Labor Department releases the jobs report for May. Economists forecast a 188,000 gain for nonfarm payrolls, after a 253,000 increase in April. The unemployment rate is seen edging up to 3.5% from 3.4%, which was the lowest since 1969. Average hourly earnings are expected to be up 4.4% year over year, down from an increase of 4.45% the month prior.

And I thought this was interesting although off our point…

Why You’re Losing More to Casinos on the Las Vegas Strip

Casinos on the Vegas Strip are making it costlier to play and harder to win. Payouts are lower for winning blackjack hands. Bets on some roulette wheels are riskier. And it is taking more cash to play at many game tables. Blackjack players lost nearly $1 billion to casinos on the Strip last year, the second-highest loss on record, Katherine Sayre reports.

Please remain safe and stay healthy, make today great!