Waiting for Job Market Reports

This will be a big week for economic reports, highlighted by Thursday’s ADP employment report and Friday’s Bureau of Labor Statistics (BLS) estimate of new hires in the month of July.  We will see if the labor market is continuing to heat up, which I anticipate it will show.  We generally see strong hires in the month of July.  With this coming during a time when economic growth and the labor market are both on fire, we could easily beat market expectations of about 190.000.  This report could provide the catalyst to push bonds out of the tight channel in which they have been trading.  Current odds favor rates moving higher.

I’ve always been a bit of a contrarian thinker.  As such, I look for signs that the masses may be missing in their decision making.  For example, when the masses are rushing in to purchase anything, it makes me question the longevity of what ever market they are purchasing.  Whether it be stocks, bitcoin or real estate, the masses usually lose in the long run.  In other words, they wait to purchase when prices are inflated.  The ones who bought when the markets were down end up being the winners.  There are some clear forward indicators pointed towards weakness developing in the national housing market.  I will expand on my thoughts in an upcoming newsletter.

With bond prices still unable to break above their 100 day moving average, we will maintain a locking bias.