Hey There Income Hunters,

 

IF you can believe in the integrity of the Bureau of Labor Statistics (BLS), the labor market is still very strong. 

 

Nonfarm payrolls came in at 236k vs. 230k expected and the unemployment rate actually came down .1% to 3.5%. 

 

These numbers do not include the impact of the banking stress however and the forward-looking employment reports tell a very different story.

 

The bottom line here is this report allows the Fed to remain on the “hawkish” side of things and continue this charade of, everything is fine …

 

US Treasury Bond Rates spiked higher on the report and this could create some volatility for markets this week …

 

 

Today, we’ll look at which market may be most impacted by the report and trades to consider. 

 

Real Data Shows Layoffs up 400% YoY 

 

Companies announced 90,000 layoffs in March according to the Challenger report on Thursday.

 

 Job cuts have soared 270,416 from a year ago … 

 

Plus, according to a sum of the countries Worker Adjustment and Retraining Notification Act (WARN) notices, we may see a big uptick in initial jobless claims in the months ahead. 

 

As you can see in the chart below there is a very tight correlation between WARN & initial claims.  

 

 

The Cleveland Fed has done analysis on Warn notices and results show they lead other labor-market indicators including claims. 

 

Last week claims rose considerably and the prior month’s results were revised upward.

 

As you can see below the odds of a .25% rate hike on May 3 is now at  67% … 

 

 

Should be an interesting week after SPX tested the 4100 level on Friday but sold off in the last half an hour (chart below).

 

 

 

Notice the volatility trigger at 4055. The volatility trigger is a pivot level where option positioning switches from bullish (above) and bearish (below).

 

I would expect us to test it early in the week and possibly break below for a test of the 4000 strike. 

 

Important events this week include:

 

• Wednesday, April 12 (8:30am EST): CPI; FOMC minutes
• Friday, April 14 (before market open): JPM earnings

 

Plus $92 billion in Treasury issuance, which could put a little pressure on stocks also. 

 

I anticipate a correction in metals and I will add to longs on break in Gold to the 1925 area and based on the move in rates on Friday we may get that. 

 

Live and Trade With Passion My Friend,

 

Griff