NFP Blowout Who Believes It???
Nat Gas picking up steam
So once again we have a major blowout number a 6 sigma beat in fact as Non Farm Payrolls jump +336k vs expected +170k. Yea we believe it alright…not:
As much of the data that comes out of our government sponsored agencies, we feel that we can no longer trust any of it and its not our opinion, but empirical based, off of every single monthly revision as far as the eye can see that comes out. No its not just revisions down, but revisions up like the last 2 months, so its going in both directions, so we cannot take the front end number for face value. We also need to understand the methodology used in these numbers, which has a lot of built in assumptions.
In either case, we do not feel that this number is an accurate representation of what is really going on out there in the real economy, yea we can double count one person’s two part time jobs and say that its great for the individual, but really if we sacrifice one $100k job for two $30k part time jobs are things really equal?
Alright so we are going into a long weekend and the equities took this number and ran with it, but we aren’t going to comment on them now but in our article we will write over the weekend.
Ok here is yesterdays settlements which shows a continued steeper US yield curve (shorter notes outperforming longer dated bonds) and its nice to see Nat Gas back in the spotlight after a years worth of subsidized non zero sum player selling and price capping…winter is coming and its shaping up to be a doozy…will see how much they will need to subsidize it again:
Speaking of long duration bonds, if people don’t think this 140 basis point move for a security with a $1500 $dv01 isn’t a big deal, then you better wake up, corporations have not seen the brunt of this yet, but with $4T coming due over the next year, rest assure higher rates will destroy a few companies bottom lines once their new interest rate kicks in:
As far as the GFBP no changes to our futures positions tracker:
When we look at the MEGA8s they are holding up and our options positions continue to benefit the overall return and risk adjusted profile. As of this email and this morning the tracker will have covered the 363C which expires today at .20 and has put on the hedge for next weeks expiration on the 13th, the 365C at 3.00:
We continue to follow a few other equities and will start listing those perhaps in the future, we like long plays in PayPal and MicroStrategy and short plays in Chipotle and Lululemon, we have posted charts prior on those but perhaps we will keep a more in-depth tracker for our subscribers on future plays. For now we know the entire investment community is focused on the MEGA8s buying these and the big guys selling indexes against the basket. OK have a great weekend we will be back sometime over the next few days!