December 11, 2019

WOW the jobs number was very impressive! The blowout jobs number is a home run for America. Jim Cramer summed it up very well when he said “It doesn’t matter whether you hate him or like him, these are real numbers,” in reference to Trump. “You can’t contradict that these are the best numbers of our lives. You can’t,” said Cramer.

  • Nonfarm payrolls blew away the consensus forecast of 187,000, expanding by 266,000 in November.
  • Additionally, the prior two months were revised up by a total of 41,000 payrolls.
  • The unemployment rate rounded back down to 3.5%, below expectations for unchanged at 3.6%, and matching our estimate.
  • Wage growth eased to 3.1% y/y, but the prior month was revised up to3.2% y/y from 3.0% y/y.
  • This report means consumption should be well supported, and the Fed can sit on its hands for a while - perhaps all through next year.

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Equity markets are likely to remain in shallow, choppy consolidations over the coming week as short-term indicators unwind from overbought levels and investors face the uncertainty of this week’s FOMC meeting and pending tariff deadline. However, beyond the short-term noise, the far more important longer-term cycle backdrop remains positive and should support further upside through 2020 into 2021. Stay focused on the long-term cycle heading into the early January noise. 


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As the December 15th deadline on new tariffs approaches, Trump has opportunities to dominate news cycles by creating tension as to the future of a Phase One agreement with China. Signs point to either an agreement or announcement of significant progress by week’s end to permit a delay of new tariffs. Talks continue on a new NAFTA, with Speaker Pelosi looking for a bipartisan accomplishment that could follow a harsh, purely partisan impeachment vote.

On Tuesday and Wednesday, the Fed’s Open Markets Committee (FOMC) meets to determine if any action needs to be taken on rates. The Fed Chair and other officials have sent some pretty strong signals that there will be no cut in rates at this week’s meeting. The strong jobs numbers on Friday all but assured that there will be no rate cut and that the Fed Chair’s remarks are likely to guide for no cuts into the first quarter of 2020.

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