When it comes to your money, it's really all personal.
Global Macro Forces are Being Watched More Closely
Market sentiment appears to have shifted in recent days as most headlines have been viewed in a negative sense even when they sometimes counteract each other. Below are a few noteworthy items:
The U.S. economic data was highlighted by the nonfarm payroll report which showed 187,000 jobs being added in July. This could be taken as a good step toward a soft landing as it eases pressure for the Fed to hike rates. Focus shifted to the fact that it was the fifth straight month of revisions being lower than the initial release. The unemployment rate fell to 3.5%. Not often followed are the average weekly hours, which have slipped to 34.3 versus 35.0 in early 2021.
Upsized Deficits
The Treasury upsized its anticipated borrowing this quarter to $1 trillion, which is 36% more than its initial estimate. This likely contributed to higher yields as it drew attention to the large deficit. The Treasury General Account has increased by about $500 million, which draws liquidity out of the system, but was offset by a drop in the reverse repo pool from $2.3 trillion to $1.8 trillion. The reverse repo buildup can cushion high Treasury issuance for a period, but eventually rolling these over will be a liquidity drain and potential risk factor for equity markets.
We work and live here, just like you. Supporting our communities is important. It's that simple.