October 6, 2023

Markets:

U.S. stock futures fell Friday as Treasury yields jumped following the release of stronger-than-expected U.S. jobs data.

The U.S. economy added 336,000 jobs in September, the Labor Department said. Economists polled by Dow Jones expected 170,000 jobs. To be sure, wages rose less than expected last month.

The benchmark 10-year Treasury yield jumped more than 12 basis points to trade near a 16-year high set earlier this week.

Friday’s jobs report raised concern among investors that the Federal Reserve will need to keep rates higher for longer to tame inflation.

Bond yields popped and stock futures fell in reaction as the strong numbers could allow the Federal Reserve to keep hiking rates.

There was some good news on the inflation front in the report, however. Average hourly earnings increase 0.2% for the month and 4.2% from a year ago, compared to respective estimates for 0.3% and 4.3%.

Portfolio:

Our current narrative revolves around an interesting paradox: the idea that good news can sometimes be perceived as bad news, especially in light of the latest jobs report. Typically, the markets forecast trends over the next 12-18 months, but when it comes to the monthly jobs report, they tend to react impulsively every first Friday. However, this knee-jerk reaction sets the stage for what promises to be an exceptionally lucrative earnings season—a prospect we're eagerly anticipating.

We enter the final trading sessiong of the week holding positions in TH, TQQQ, AX, UNG, and PATH. It's essential to bear in mind that rather than chasing daily fluctuations, it's more profitable to adhere to a well-thought-out trading plan. This strategic approach is key to reaping substantial gains in the current market environment.

We're eagerly looking forward to next week and the opportunities it holds as we navigate the path toward the conclusion of 2023. Stay prepared for updates and the possibility of new trade alerts, and keep a keen eye on how the market responds this morning.