June 6, 2019 Bonds and Stocks Are Both Liking Something by Lester Murray

Bond prices are up this morning and the same is true for most equity indices. Everybody likes that our nest of central bankers has an increasing population of doves, but let's not forget about the traditional economic fundamentals that, wrongly or rightly, garner much attention. Like tomorrow's Jobs Report. Does today's equity rally portend a "good" report, or does today's bond rally portend a "bad" report. Or, does the new, and newly perceived dovish Fed make the impact of any fundamental report less relevant. Maybe we'll see in the morning.

Yesterday's private, ADP Jobs report was a major disappointment. Experts expected that report to reveal that 185k new jobs were created in May, but the actual reading came in at just 27k. Sometimes the ADP lines up well with what the Bureau of Labor Statistics reports, but not always. The experts that got the ADP report wrong are still expecting 180k new jobs to be reported in tomorrow morning's BLS report. We'll see.  Most of what will be in tomorrow's report can be described as lagging indicators of economic zeal and will be of less than paramount significance to our policy-makers. Nevertheless, its dissection will be of paramount interest to most everyone.

While we're waiting, the Treasury market isn't, and today's little rally has pushed Ten-Year yields below 2.10% and created a negative spread between 90-day bills and Ten-Year Notes of about -22 basis points.