August 5th, 2016
The strong Jobs Report pushed MBS lower and continued to drift into negative territory as the S&P and the Nasdaq closed at record highs. The Labor Department reported that U.S. employers added 255K jobs in July vs the 185K expected. The 3% Fannie Mae 30-yr coupon closed at 103.66, -31bp. The Dow gained 191.48 points to 18,543.53. The S&P finished at 2,182.87, +18.62 points while the Nasdaq gained 53.85 points to end the week at 5,220.10, both closing record highs. WTI oil was last seen at $41.89/barrel, near unchanged. 10-yr T Note yield 1.58%. Next week's economic calendar is on the light side, but we will see readings on wholesale inflation, Consumer Sentiment and Retail Sales. Have a great weekend!
Below is the news when it happened and market reaction
8:47 AM - The Labor Force Participation Rate rose to 62.8 from 62.7 and is a measure of the active portion of an economy's labor force. It refers to the number of people who are either employed or are actively looking for work.
8:44 AM - The U-6 number or the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force rose to 9.7% from 9.6%.
8:40 AM - S&P futures add to gains after the jobs data.
8:37 AM - MBS take a slight hit.
8:37 AM - The dollar index surges by 0.41 to 96.12 as investors feel the strong jobs number could usher in a rate hike sooner rather than later.
8:34 AM - May and June payrolls revised higher by total of 18K.
8:33 AM - Unemployment Rate 4.9%, inline.
8:32 AM - 255K new jobs created in July vs the 185K expected.
8:32 AM - Average hourly earnings +0.3% vs the 0.2% expected.
8:17 AM - U.S. dollar index 95.51, -0.20.
8:15 AM - WTI oil $41.90/barrel, unchanged.
8:14 AM - 10-yr T Note yield 1.49%.
8:10 AM - Ahead of the jobs data, Fed Fund Futures show just an 11% chance of a hike to the Fed Funds Rate, a 32% chance by December.
8:01 AM - The Federal Reserve's move to raise the benchmark Fed Funds Rate is contingent upon a number of economic indicators, including a strong labor market and inflation meeting the central bank's 2% goal.
8:00 AM - The first half of 2016 saw an average monthly addition of 171,500 new jobs per month.
7:58 AM - S&P futures modestly higher.
7:57 AM - MBS look to open near unchanged ahead of the data.
7:55 AM - Investors eagerly await the 8:30 a.m. release of July Non-farm Payrolls where it is expected that U.S. employers added 185K new workers.