Jobs Day - December Tapering Back on the Table?

Vital Statistics:

	Last	Change	Percent
S&P Futures	1741.8	-3.4	-0.19%
Eurostoxx Index	3009.5	-33.4	-1.10%
Oil (WTI)	94.24	0.0	0.04%
LIBOR	0.239	0.001	0.21%
US Dollar Index (DXY)	81.22	0.373	0.46%
10 Year Govt Bond Yield	2.72%	0.12%
Current Coupon Ginnie Mae TBA	105.3	-0.7
Current Coupon Fannie Mae TBA	104.5	-0.7
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.27

Stocks are down in spite of a jobs report that showed a better-than-expected increase in payrolls. Bonds are getting slammed on the number, with the 10-year down 12 basis points.

The economy added 204,000 jobs in the month of October, well in excess of the 120k street expectation. September was revised upward. The government shutdown was expected to depress job growth and it looks like that didn't happen. The unemployment rate ticked up to 7.3% and the labor force participation rate nosedived to 62.8%, the lowest since January of 1978. Average hourly earnings ticked up a tenth of a percent and average weekly hours fell. Overall, the report was a mixed bag, but it does bring back the possibility of a December tapering. Separately, personal Income rose .5% and personal spending rose .2%. 

The chart below shows the labor force participation rate since the days of Ward and June Cleaver. The big increase was due to women entering the workforce, which shows how dramatic the decline has been. Roughly half the gains have been taken away.

Twitter's IPO went swimmingly. It priced at $26 and traded as high as $50. It now sports a 25 billion market cap which works out to 48 times trailing 12 month sales. 

Freddie Mac is doing another risk sharing deal as the GSEs try to lower their footprint in the mortgage market.

Brent Nyitray, CFA

Director of Capital Markets

iDirect Home Loans

National Asset Direct

Dellacamera Capital Management

1010 Washington Blvd, 6th Floor

Stamford, CT 06901

203-817-3614 (w)