August 8th, 2022 - Market Update
Current position: Carefully floating
Stocks are higher and Mortgage Bonds are trading near unchanged levels so far this morning.
Friday's Jobs report once again showed a big divergence between the Business and Household Survey, which showed 528,000 job gains vs 179,000.
And over the past four months, the Household survey has flagged a 168,000 decline in employment, 84% of which has been a loss in full time positions.
The Business survey, meanwhile, has shown a net employment gain of +1.68 million. A historical divergence.
What the Fed is likely not going to focus on is the fact that full-time employment dropped for the second month in a row, and the number of people working part-time because of weak economic conditions soared by 303k in July.
As well, half the job gain last month was de facto double counting from people garnering a second or third part- time job.
It's important to note that the business survey, where the headline job creation number comes from, counts multiple jobs that workers may have. The household survey, on the other hand, only counts them once.
This week will be highlighted by the July Consumer Price Index and 10-year Auction on Wednesday.
Mortgage Bonds are moving higher after testing a quadruple floor of support, formed by the 25-day Moving Average, 50-day Moving Average, Fibonacci level, and rising trend line, which is holding so far.
The 10-year has moved back under 2.79%, which is significant. If yields can remain beneath this level, there is room to move lower until reaching 2.58%. Begin the day carefully floating.
Source: MBS Highway
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