By Peter Tchir of <a href="https://academysecurities.com">Academy Securities</a>

On the surface the NFP data had a “goldilocks” type of character.

The obvious flaws in the report were:

A significant miss on Private Payrolls. Private payrolls were only 136k, and we lost 8k in manufacturing. The headline number was supported by government jobs, which is consistent with JOLTS where the increase in jobs available was totally linked to government jobs, as opposed to private sector jobs.

The bigger questions remain:

We still have the drama unfolding in D.C., which we think warrants hedging against geopolitical risk (<a href="https://academysecurities.com/macro-strategy-insights/assume/?asmac=c1106ad3-0460-4770-8483-30472ede0332">Don’t Assume</a>) and lots of questions about valuations and breadth, but we can see an initial “goldilocks” type of reaction to the data.

On the surface the NFP data had a “goldilocks” type of character.
{ai:summary}Despite some positive aspects, the NFP data showed flaws like downward revisions and less private job growth. Potential flaws in the Birth/Death model raise questions about job numbers. D.C. drama and geopolitical risks warrant caution in the markets. #economyTreasury yields may remain steady with lower yields supported by the Fed. Equities could see continued bounce but risks of negative economic impact loom. Credit spreads should remain stable with competition among lenders. Vigilance on geopolitical risks recommended. #economy

Payrolls: Goldilocks Or Not?

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