Good Morning on this best day of the week Wednesday,

Despite repeatedly bad economic news releases, we are not seeing any traction in the bond market. Today the ADP jobs number was horrendous. Only 138K new jobs. This is not enough to keep up with the jobs lost due to people leaving the workforce. Friday is the Non-Farm payroll numbers, and if they come in as poorly as the ADP numbers, it will confirm the economy is faltering (despite what the Fed says).

Soon, we should see bonds wake up and start rallying. At this time, we are still under the Powell shadow from last Friday. He was as anticipated, hawkish, and it may take a while for the market to shake off his commentary. Keep in mind that if Friday’s jobs report comes in stronger than expected (right now markets looking for a print of 300k), all bets are off on rates. 

Goldman Sachs, which has some pretty smart people on the payroll, shared a new report today.

Just a snippet, but the punch line is that, price growth is still forecasted but at a decelerated pace… Not long after the central bank began applying upward pressure this spring on mortgage rates, the housing market slipped into slowdown mode. Home shoppers across the country put their home search on pause. That housing market downturn, the Fed hopes, will slow down the rest of the economy and, in theory, help to rein in runaway inflation…  Heading forward, Goldman Sachs expects home price growth to decelerate significantly. The investment bank expects home prices to rise just 1.8% in 2023.

Please remain safe and healthy, make today great!