Pre NFP-Commentary
The QRA is something that I had not written about, mainly because as it was so talked about, there was no marginal information to opine on.
Whatever the numbers, they were likely priced in – outside of some crazy outliers. A review of the tape brings an observer to the same conclusion.
Bond yields moved little after the 8:30am release, but really cratered going into the weak ISM, signaling the growth slowdown was going from an academic exercise to an expected one.
Things really got moving with the release of the Atlanta Fed now-cast that took Q4 GDP down to 1.2% from 2.3% the prior week.
Yesterday’s FOMC meeting was basically inconsequential.
After reviewing the presser transcript, here are my conclusions:
The Fed is cool with things as they are.
Powell said wage inflation was not a thing, thus far.
Economy is solid, and there is no rush to cut rates.
Today’s non-farm productivity data confirms as much: real wages can keep growing, along with economic output, without triggering a wage-inflation spiral.
Non-Farm Payrolls, Santa, Money & Strategy
Hopefully some folks were positioned, or got positioned, to take advantage of some the developments above.
Remember, PNL > shiny toy models.
The question now is, did Santa get here early? Is the SPX on to new annual or even all-time highs?