Happy Friday AM,

Not a good day for the bond market so far. The 10-yr is at 1.80% and Mortgage bonds are off 45bps. What that means is temporarily, rates are at the high point over the last 20 months (start of the pandemic). Lots of news about the jobs report which I grade as a C (maybe a D) but nonetheless traders trade and you can’t fight it. Just know the selling will be over shortly. That would be the glass half full version. We need to ride this wave up to get to the other side which will come (hoping for sooner than later). On to the jobs report. Markets expected 400k new jobs, we got less than half that. The headline unemployment number dropped to 3.9% on expectations of 4.1%. Traders trading this number to create the volatility, not because they see it as a good thing. It is not. We have effectively reduced the labor force enough and cut back on job openings so that growth will stagnate. The Fed will use this information to spin it to a tight labor market and look to tighten monetary policy, but as I expect prices to stabilize (we are seeing it already), Fed tightening will likely stagnate the economy more quickly. We will see but in the meantime, I think markets are fully priced in for 2.5 rate hikes for 2022 and we should see some improvement in the next little bit.

Great piece in the WSJ on luxury homes and home prices. Here’s the link with a detailed list of the highest prices sales. The cliff notes are:  At least 40 properties in the United States sold for $50 million or more last year, a 35% increase from 2020, and at least eight sold for at least $100 million, a 300% jump from the prior year.

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