Good Morning on this Thankful Thursday,
Bonds are under some more pressure today despite some weak economic data. The country is only hearing everyone is back to work and its business as usual. I don’t understand it, but maybe it is because we live in a city with 30% unemployment. The 10-yr is having an even worse day than mortgage bonds with the yield at .81%. We need to get back below .75 or we run the risk of heading to 1.00% (amazing how the optics have changed and now a 1% rate on the 10-yr is a bad thing). It continues to be all about the stock market right now. Until stocks pull back, or the Fed steps in with a bigger gun, bond yields will unfortunately rise.
The best news I can share is that purchase applications have jumped, leading us to think that the spring buying season has just shifted to the summer, not gone away. Pent up demand and the need to move before the fall school semester (expecting there is to be one), is going to fuel the market activity. Now, we just need inventory.
With tomorrow bringing the biggest data set of the month, the BLS jobs report (which I anticipate to be pretty bad), I thought I would share a little primer from Bloomberg on the short term prospects for unemployment. Close to 6 million jobs are potentially on the line, according to Bloomberg Economics. That includes higher-paid supervisors in sectors where frontline workers were hit first, such as restaurants and hotels. It also includes the knock on-effects to connected industries such as professional services, finance and real estate. More than one-third of households making $100,000 per year have lost some employment income since mid-March, according to a Census Bureau weekly survey. And more than 25% expect to lose income in the next four weeks. Even among this higher-paid group, 7% are only slightly confident or not at all about making next month’s rent, while 5% of homeowners are just as concerned about making their mortgage payment.
And the following is not a political statement. Just sharing some interesting insight courtesy of the WSJ
Betting markets’ odds for the US presidential elections:
Please stay safe and healthy and make today great!