October 06, 2022

The DC Today - Thursday October 6, 2022

10 minutes

A little market move down today – nothing to write home about. But more information on big picture you will want to listen to right here …

MARKET ACTION

Dow: -347 points (-1.15%)

S&P: -1.02%

Nasdaq: -0.68%

10-Year Treasury Yield: 3.83% (+7 basis points)

Top-performing sector: Energy (+1.82%) – fourth day in a row

Bottom-performing sector: Utilities (-3.30%) – second day in a row; rare and nasty

WTI Crude Oil: $88.90/barrel (+1.26%)

Key Economic Point of the Day:

Initial jobless claims came in at 219k, higher than the 203k expected (though continuing claims came in a tad less than expected)

Mortgage rates at 16-year high … (6.75%)

ASK DAVID

“Given the tight labor market and recognizing the number of people that left the workforce over the past 2+ years, is it reasonable to expect a decrease in unemployment numbers any time soon? If it’s not reasonable to expect a decrease in unemployment numbers, do you think the Fed should use this criteria as a benchmark for monetary policy?”

~ Ed D.

Unfortunately, I do believe unemployment will go higher, and I do believe it will be relevant to Fed policy. Technically their dual mandate includes full employment, so if they pursue a monetary policy that increases joblessness I believe they will reverse course. I don’t think it is the benchmark they say it is, but I do think right now it gives them cover in non-effective monetary tightening (if anyone still believes the Fed Funds rate is causing inflation I have a bridge to sell them, assuming I can get the parts and labor).

Links mentioned in this episode:

TheDCToday.com

TheBahnsenGroup.com

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