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Market Snapshot October 13, 2021

Good Afternoon on this best day of the week Wednesday,

The core level of inflation came in lower than expected, which is fantastic for bonds. The Core Inflation numbers exclude volatile food and energy. Although they impact our wallets when we drive and eat (two sort of important things), they are too volatile to track on a month over month basis, so traders focus on the core number. This is lucky today because the headline inflation number which includes food and energy, came in hotter than expected. Bond prices gapped up this morning and the market hates gaps and will often run down or run up to fill them. I tell you this so you are not too surprised if we see a mid or late day pullback in bond prices. Given yesterday’s late day technical bounce and this morning’s lower than expected inflation numbers, we should see prices continue to improve. That said, we will see the PPI numbers tomorrow and those could rain on our parade. PPI is the wholesale rate of inflation and given the supply chain disaster we are experiencing; we could see further pressure on PPI. This could kill our newborn rally. Let’s see how the day goes.

This piece does not make much sense to me. People are quitting more now than ever since 2000, even with stimulus ending. Looking for higher paying jobs?

A record number of U.S. workers are quitting their jobs. In August, 4.27 million people, or 2.9% of the workforce, quit a job, the highest such figures on record in data tracing back to 2000. The high level of departures is another complication for employers already struggling to hire. The quits also reflect “the confidence workers have in securing new employment, and the improved bargaining position workers have given labor supply shortfalls,” said Berenberg Capital Markets economist Mickey Levy. Amid rising Covid-19 cases, Americans were especially quick to leave jobs with face-to-face contact such as restaurants, bars and retail. But other sectors are also losing workers at or near record rates, including construction, manufacturing and health care.

Please remain safe and healthy, make today great.