Phil Grossfield's Blog

I Just Can’t Help It.  My apologies, but I’m going to be writing about American Idol occasionally over the next several weeks.  I just can’t help it.  Although I usually don’t apologize for what I write, I know there are those of you that aren’t huge fans of American Idol…like my wife. But, like my wife, I can get you to admit that one or two artists are pretty good and worth a short listen. So, think of it like this…I will weed out the crap and only report on the non-crap…the good…the talented.  I won’t waste your time.

It’s well documented I love the dream, love the music, and love watching the progression of each.  This year there is less antagonism and no cruel or spiteful exchanges among judges.  Yes, the contestants do sabotage themselves, but at least this year the judges are mindful to inspire.  And, this year there are more extremely talented people. I like this girl:  Majesty Rose York.

My Schedule:  I have a meeting in Irvine at 1:30p today and will be driving north after noon. Then headed back down to San Diego late in the day.

My Market Watch:  Bonds Par with Yesterday’s Close.  Prices Worse.  Jobs Reports Tomorrow.  The 30-year Fannie Mae bond is down this morning but only -2bps from yesterday’s close.  The story this morning is tomorrow’s Jobs Report and Unemployment Rate.

The Jobs Report tells us how many new jobs were created in January and the unemployment rate tells what percentage is out of work.  If the Jobs Report shows more new jobs than expected, then traders will interpret this as a sign the economy is doing well. A lower unemployment rate would have a similar effect. That makes sense, right?  Traders invest their money into the stock market when they’re bully on the economy, and they’ll pull money out of bonds to do so…this results in worse rates/pricing for us. On the other hand, if the Jobs Report comes in less than expected, and/or if there is a higher unemployment rate reported, then traders will interpret the economy is a bad bet.  They would rather sell off their stocks and put that money into bonds…its a safer bet.  When they buy bonds our rates/pricing improve. It’s as simple as that.

The Jobs Report is a market mover…traders pay close attention…they try to predict what will happen and react sharply when the report is released. Obviously, the real swings occur when the report comes in significantly less or more than what was expected. It is expected that 181,000 new jobs will be reported.  From what I’m reading, this might be aiming low and more jobs than expected might be reported. If so, rates would get worse. But you need to do your own research and rely on the same before you decide to lock or float your loans. Feel free to call me to discuss….