Non-farm payrolls surprise economists, driven by easing of pandemic restrictions. Shocker, eh!
That was this mornings headline response to the monthly non-farm payrolls data released by the Bureau of Labor Statistics.
Non-farm payroll highlights:
- employment rose by 943,000, expected 845,000, best since August 2020
- Unemployment rate slid to 5.4%, expected 5.7%
- increase driven by growth in leisure and hospitality
- tight labor supply, potential upward wage pressure
Bureau of Labor Statistics Employment Situation – July 2021
The 10 year US treasury yield spiked higher after the press release. The chart below illustrates the magnitude of the move higher in yields.
At any rate, yields may have bottomed, at least for now.
- RSI – needs to capture 50 level
- 10 day moving average – cleared
- 50 day moving average – 1.3% (overhead resistance)
To be sure, this move higher in yields is not set in stone. In fact, there is a possibility this move could be a fake out. However, the stage appears to be set for a trend reversal. This could drive equities higher.
Conclusion
Surely, the non-farm payrolls surprise was not a shock to anyone, regardless of what the Financial TV experts claim.
In the end, what should you do? Is there a trade or investment opportunity to take advantage of?
Indeed, today’s spike in treasury yields is interesting. If yields continue to move higher, cash is leaving the bond market and bidding up stock prices via equity ETFs.
As a result, I will be monitoring yields closely. For now, the bull market in stocks is not running out of steam.
DISCLAIMER: Content provided in this article is for informational and entertainment purposes only. This article is not legal and/or investment advice. This article should not replace professional investment advice based upon your particular situation. Duties are not assumed, intended or created by this communication.
© 2021 mikehoganonline.com, All Rights Reserved
