The Morning View: October 3, 2019

  • October 3, 2019

Senior Vice President / Portfolio Manager

Announced this morning, Initial Jobless Claims were 219,000 for the previous week, a bit above the 215k expected. As a weekly, current data point, claims have remained in the low 200,000’s for many weeks. Historically, a level below 300k is indicative of a healthy labor market. With yesterday’s monthly ADP Employment Change coming in at 135,000 jobs created in September, a bit lower than expected, it sets up an important monthly jobs report tomorrow. The labor market helping to fuel consumer spending has been one bright spot in economic data this year, but weaker readings in manufacturing and business investment are apparent. This, along with increased political uncertainty, continuing trade tensions, and lingering global growth concerns, have all contributed to the equity market volatility at the start of October. If the jobs data disappoints tomorrow, it could cause the Federal Reserve to rethink and intensify their “midcycle” rate cut adjustments. In all, bond yields are little changed following the report, with the 10-year yield about 13 basis points above 2-year yields. Equity futures are higher heading into the market open.

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