Some people have it. The luck of the Irish. Syria handed Trump the opportunity to do something that everyone will support. Bomb Syria. Assad must be an Idiot.Trump couldn't have asked for a better card. A Trump card. Lucky.
The Non-Farm Payroll was up only 98K. Consensus 175K. It had been 238K in January. February was revised down from 235K to 219K. That has weakness in the Service sector. The January number is being revised down by 38K. Winter Storm Stella was to blame. We don't like to do that.The markets' reaction was Risk Off. The USSD/YEN went down.There were a number of comments about a Flight to safety. The VIX went up and stayed up. Generally, the reaction is that the FED won't Raise in this environment. Maybe only one more this year?
The Private sector added89K jobs.The participation rate was unchanged at 63.0%. Construction had added 58K in February. Today's unemployment is 4.5%. That's the lowest level since 2007. It's been going down for each of the last 5 months. Disappointing that the Hourly wage was up by only 0.2%. This does seem to bear out the case that the Millenials are being hired at lower wage rates. We do take great encouragement that the U6 dropped from 9.2% to 8.9%.
The Participation rate was unchanged at 63%. Surely then if the U6 was down, it means that some of the discouraged workers are returning.The Anecdotal evidence of qualified worker shortage would then seem to be right.
The Institutional Managers are focussed on their exposure to their Benchmarks. They seem to have done Okay in Q1. Now What? The market is set to go Risk on again. The Institutions are going to stay close to their relevant Index. If nothing else they are going to expend significant energy to avoid Portfolio Torpedoes. Trump's bombing Raid should help his approval ratings. The disaggregation of Dodd-Frank will allow some oxygen to get to the economic engine. Growth without Inflation?
Invest the Money.
Edward Pennock CFA, Founding Partner
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