The DC Today - Tuesday, October 3, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 3 October 2023
⏱️ 6 minutes
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Summary
Today's Post - https://bahnsen.co/3RJ28h3
Markets were hit hard again today, and I do imagine we are getting closer to some short-term capitulation, but you never know. The way the regional banks have been acting lately is noteworthy. This bond rally has not let up and is basically 100% of the current market story.
Why have oil prices gone up so much even as gas prices have not really gone up (and have, in fact, come down)? Refinery margins have collapsed, period. There is more than one input to retail gas prices at the pump.
Cleveland Fed President, Loretta Mester, is the latest Fed head to say she believes another rate hike is needed. But she also said part of that would depend on … “the UAW strike” ?????? Yep. She is not a voting member of the FOMC, by the way.
You’ve heard all the talk about record levels of credit card debt. It is currently 3.7% of nominal GDP. It was 3.9% of nominal GDP in late 2019. It was 4.2% in 2010 after the financial crisis. Sorry, but the numerator is not the only number in a fraction.
Market rates are tightening without the Fed. The idea that the Fed would pour gasoline on top of this is surreal to me. But so is modern central banking.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:14.0 | Well, hello and welcome to the Tuesday edition of DC Today. It's a short one today, although not because it was such an uneventful day in markets. |
| 0:21.9 | Markets were actually hit pretty hard. And the reason was, I mean, it was already a down day, |
| 0:27.2 | so I don't want to overthink this. You know how I feel about trying to speculate on an exact |
| 0:31.6 | reasoning. But you can tell when bond yields moved higher, it was when the Joltz data came out. |
| 0:37.0 | And that's the job openings report where you get the data on how many jobs are open that have not been |
| 0:44.0 | filled. It's sort of the inverse of people looking for jobs and don't have one. That's the |
| 0:48.2 | BLS data, Bureau Labor Statistics, what we think of as the monthly jobs report. The job |
| 0:54.0 | openings is sort of on the employer side. Think of as the monthly jobs report. The job openings |
| 0:54.5 | is sort of on the employer side. Think of it this way. The Joltz is like the supply side, |
| 0:59.1 | and the BLS is like the demand side. I just made that up right now, but I think it's accurate. |
| 1:04.0 | It has the Joltz data usually comes with a quit rate. You can tell how many people have quit |
| 1:08.6 | a job to go to another one, things like that. |
| 1:11.8 | And so you would think in Dave Land that less jobs open is a good thing because we like the |
| 1:20.0 | idea of employers having their needs met and we like the idea of needs being met for |
| 1:24.3 | workers by them finding a job. So a lot of openings of a job, I don't know how really to say this. |
| 1:32.3 | The number went higher and the bond yields flew up. |
| 1:37.3 | And so I think it was 8.9 million expected. |
| 1:40.3 | It was 8.9 last month and it went to 96. Now, in theory, I would think that |
| 1:46.9 | seems like a bad thing. There's others who think it's a good thing or it points to low, |
| 1:51.3 | a lot of slack, which means that there will be continued low unemployment. And their |
| 1:57.0 | interpretation of what's bad about it is the belief that we need a lot of people lose their job for the Fed to cut rates. |
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