- Fed Balance Sheet (WALCL): -47B (-0.62% w/w); 2 year low. contractionary.
- Total Bank Credit (TOTBKCR): +42B (+0.24% w/w); expansionary.
- 10 Year Treasury Yield (DGS10): 4.05% -10 bp.
- 30 Year Mortgage Rate (MORTGAGE30US); 6.63% (-6 bp).
- Nonfarm Payrolls (PAYEMS): +353k (+0.22% m/m), expected 170k.
- Only Part Time Work Available (LNS12032196): +62k (+6.43% m/m); increasing; slight hint of recession.
- Average Hourly Earnings, Private (AHETPI); +0.13 (+0.44%) m/m, +4.8% y/y.
- Auto/Light Truck Sales (ALTSALES): -7.44% m/m, drop from a lower high.
- Strategic Petroleum Reserve (WCSSTUS1): +892k (+0.25% w/w), modest refill.
There were two market-moving events this week – the Fed meeting/press conference on Wednesday, and Nonfarm Payrolls on Friday.
On Wednesday, the Fed didn’t cut rates, and during the press conference, Powell seemed to suggest the Fed wasn’t setting up to cut rates in the near future, and that QT wasn’t stopping either. Wolf has more detail:
Wow, Fed’s Statement Pushes Back against Rate-Cut Mania and End-of-QT Mania. Holds Rates at 5.50% Top of Range, QT to Continue as Planned (source – wolfstreet);
No Pivot For You, little people.
Payrolls were surprisingly strong, way above “expected” values, although there were some hints of a recessionary outcome in the “part time work” numbers. But so far, just hints, not any sort of “smocking gun.” There was seemingly good news seen on the “disability” front – in all groups (employed, labor force, unemployed, not-looking, total population 16+), we saw disability numbers drop, from 1.38% to as much as 2.90%.
But drilling down, there was a sour note: while the US population increased slightly, the total population 16+ shrank by 451k people, effectively all of whom were disabled. My interpretation: all those disabled people appear to have died. Looking back at history, this seems to happen more often than not (13 out of 15 years) during January – although 2024 is the 2nd worst January on record, second only to Jan 2022, which was the worst January ever. Did 481k Americans just die of vax injury in one month? My guess: its probably more like 296k, based on the historical mean drop of 185k.