06 Sep Bonds attempting to rebound
The Jobs report was reported with headline numbers of 169,000 new jobs versus the 177,000 target, and the Unemployment rate dropping from 7.4% to 7.3%. Stocks popped up initially, but the reality of a poor report seems to be setting in. Previous months of the report received downward revisions by a total of 74,000, and the Labor Force Participation Rate hit another 35 year low. Explaining the drop to 7.3% is simply a result of more people giving up the hunt for employment. Stocks dropped after the open, but then rebounded close to even, as investors realized the pressure this adds to the Fed to keep QE money flowing. mortgage bonds sold off yesterday and broke below resistance, but are attempting to gain it all back today. A close above support for bonds would give interest rates a chance to move lower and back into their trading channel. The Syrian crisis continues to loom over the markets, especially with all the talk from Russia supporting Syria with a missile defense system. However, the markets don’t appear to be that spooked over the possibility of this issue getting out of hand. That could be the result of the ongoing QE effect, a distorted reality. With bonds attempting to rebound, a floating bias may be worth the risk if they can hold the gains throughout the day. But be prepared to pull the trigger on locking if the picture changes.