Market Commentary – 4/1/16

Each new first week of the month brings us the U.S. jobs report, and this week brings good news.  New job creations came in a touch above expectations with 215,000 jobs created in March, above the 200,000 expected.

Within the report, the unemployment rate rose to 5% from 4.9%, the U6 number was 9.8% from 9.7%, and the Labor Force Participation Rate (LFPR) rose to 63% for the first time in two years.  The uptick in both unemployment and LFPR was a result of more people entering the labor force, but unable to find a job.

On a macro level, experts are debating how long can the U.S. be insulated from and continue to outperform the rest of the world.  The resiliency of the U.S. consumer and economy is second-to-none, but, in our highly interconnected world, it’s plausible to think the U.S. could experience some road bumps later in the year.  It’s open to debate how bonds and interest rates will react. There are also questions as to which tools the world’s central bankers can use to effectively stimulate the global economy.

U.S. bonds continued to trade well this week as seen by the 10-year treasury note current yield, currently <1.800%.  Technically, 30-year mortgage bonds are trading at resistance levels and we would not be surprised if interest rates moved higher in the U.S. given the ongoing positive economic data we’re seeing.