Morning Report - Not too shabby jobs report

Vital Statistics:

	Last	Change	Percent
S&P Futures	2073.1	1.2	0.06%
Eurostoxx Index	3257.6	66.4	2.08%
Oil (WTI)	66.62	-0.2	-0.28%
LIBOR	0.235	0.000	0.11%
US Dollar Index (DXY)	89.28	0.578	0.65%
10 Year Govt Bond Yield	2.30%	0.07%
Current Coupon Ginnie Mae TBA	104.7	-0.1
Current Coupon Fannie Mae TBA	103.7	-0.4
BankRate 30 Year Fixed Rate Mortgage	4.08

Markets are higher after a good jobs report. Bonds and MBS are getting slammed.

A not-too-shabby jobs report today. Payrolls increased by 321k, much better than the 230k estimate and the 208k ADP number. The two month revision was +44k. The unemployment rate held steady at 5.8% as did the labor force participation rate at 62.8%. We had a nice month-over-month increase in wages: up 0.4%, however on an annual basis, it was steady at 2.1%. 

One strange anomaly: the household survey and the establishment survey differed in a big way - the household survey (which is conducted by sending questionnaires to individual houses) showed no employment growth, while the establishment survey (which is conducted by sending questionnaires to businesses) showed strong payroll growth. The market is clearly choosing to focus on the establishment data. 

We could finally be hitting the point where the lagging employment indicators are catching up with the leading indicators. Recoveries after asset bubbles tend to be bathtub-shaped. We could finally be at the inflection point. Lower energy prices are going to be a big help as well. 

Of course lower energy prices are not great for everyone - especially those companies in the energy patch. The big new distressed trade is energy debt as many over-leveraged and now cannot borrow. Shades of the mid / late 1980s.

Of course with lower energy prices, Washington is chomping at the bit to raise the gas tax. 

Why can Apple borrow money more cheaply than the US government? Believe it or not, the 2.29% 10 year can't get any respect. 

It is an old cliche that all real estate is local. When I talk to people in San Diego, they describe a completely different housing market than the one I see up here in the Northeast. Interestingly, on the way to work today, I saw the first single family home being built since probably 2007. So maybe the Northeast is getting better at long last..