NFP Breaks Bonds and Stocks

Interest cost on US Debt does not matter!

Ok so we know the BLS numbers are not taken seriously by overall market fundamentalists especially after the Philly Fed called them out last month. With that said, it doesn’t matter whether people believe the NFP print or not, what matters is the totality of the market reaction to this print.

Just like the FOMC and their targeting of inflation “expectations” its managing expectations that is more important than the actual inflation numbers themselves. Managing these outlier numbers like the consistent beat by NFP over the last 10 months is akin to managing the expectations our administration is trying to paint, which is that our economy is rolling along just fine and that a recession is not certain…they manage this expectation by posting numbers like this NFP. Just to show you how rare these beats are, we have included the last 2 months (In Blue) to Jim Bianco’s recent chart:

Source: Bianco Research, Adjusted by Magnelibra last 2 months