Market Snapshot December 4, 2020


Good Friday AM,


The jobs report out today and was weak. Very weak. Not only minimal new jobs but the labor force shrank as well. Despite this, equities are up and Treasuries are getting hammered with the ten-year back up to .98% as there are, once again, increasing signs in Washington that a fiscal stimulus package could be agreed before the end of the year. Senior Republicans are warming to the idea of using a $908 billion proposal from a bipartisan group of lawmakers as a basis for a deal. If we run above 1%, which is quite possible, we could see the ten-year move up as high 1.2%. Miraculously, the MBS prices are hanging tough this morning. It seems highly unlikely the MBS can hold its head up, while its leader (Treasuries) are taking a beating. My concern is that the Non-Farm payroll numbers were horrible and this should have sparked a rally in bonds. We are back to the point of the market only caring about risk related trades and having no desire for the protection of treasuries. This may continue until the stock market corrects. Be very careful floating here at the top of the MBS range.


A couple of other tidbits:


President-elect Joe Biden said he would ask all Americans to wear a mask for the first 100 days of his administration to help prevent the spread of the coronavirus.


And on Covid, the NYT shared a three-step guide to risk minimization. It’s based on a Times survey of 700 epidemiologists as well as conversations with experts and colleagues, like Donald G. McNeil Jr.


1. There is one behavior you should try to eliminate, without exception: Spending time in a confined space (outside your household) where anyone is unmasked.

Don’t eat indoors at a restaurant or friend’s house. Don’t have close, unmasked conversations anywhere, even outdoors. If you must fly, try to not to eat or drink on the plane. If you’re going to work, don’t have lunch in the same room as colleagues. Group lunches have led to outbreaks at hospitals and elsewhere.


2. This next set of behaviors is best to minimize if you can’t avoid it: Spending extended time in indoor spaces, even with universal masking.

Masks aren’t perfect. If you can work out at home rather than at a gym — or do your job or attend religious services remotely — you’re reducing your risk.


3. Now the better news: Several activities are less risky than some people fear.

You don’t need to wear a mask when you go for a walk or a jog. Donald, who’s famously careful, bikes without a mask. “I consider keeping six feet distant outdoors more important than wearing a mask,” he told me. “If I had a birthday candle in my hand and you’re too far away to blow it out, I can’t inhale whatever you exhale.”


You can also feel OK about doing many errands. About 90 percent of the epidemiologists in our survey have recently visited a grocery store, a pharmacy or another store. Just wear a mask, stay distant from others and wash your hands afterward.


The big picture: I find it helpful to think about the notion of a personal risk budget. I don’t spend any of my risk budget on supermarket shopping, because grocery delivery works well for my family. But I do take occasional unmasked, distant walks with one or two friends. They help keep me sane as we head into a long, very hard winter.


For more: The survey of epidemiologists — done by Margot Sanger-Katz, Claire Cain Miller and Quoctrung Bui of The Times — has much more, including how they’re thinking about a vaccine.


Please remain safe and healthy, enjoy the weekend and first, make today great!