Job openings unexpectedly rose in April, the advance in openings was accompanied by a broad-based pickup in hiring which reached the highest levels in nearly a year. The quit rate however fell, perhaps indicating a lack of confidence in finding a new job.
BLS data indicate available positions increased to 7.39 million from an upwardly revised 7.20 million in March. The median estimate called for 7.10 million openings.
The statistics indicate a “strong job market” and the impact of the tariffs have yet to be felt in the labor markets. Most believe the data will deteriorate, perhaps the deterioration now commencing “next” month.
Equites interpreted the data bullishly. Treasuries, however, sold off across the curve with the slope steepening nominally.
Today is the release of the ISM Services Managers Index and the Beige Book or the statistical compilation utilized at the upcoming Fed meeting. What will the ISM Services Index suggest? Will the Biege Book echo well-known lines that inflation and rising unemployment and a slowing economy is all but inevitable given the potential implementation of the tariffs?
Radically changing topics and perhaps under the guise that rules don’t apply to government entities, the Federal Reserve reported that it had a $1.06 trillion unrealized loss in 2024, modestly higher than the $984.4 billion paper loss in 2023 on its massive Treasury portfolio. The Fed’s large holding are expected to stabilize in January 2026 at $6.2 trillion.
The Fed is also upside down where their funding costs are more than what their massive portfolio is yielding creating a massive multibillions of dollars of annual losses to the Central Bank.
The Fed stated these paper losses do not affect monetary policy operations and are not an issue of note given the Fed hold its bonds to maturity. The report added the unrealized losses on Fed holdings will “likely prevail for many years to come.”
If this was a private sector bank, the bank would be seized in a minute as it would be deemed insolvent and its management would be completely discredited as was the case with the March 2023 failure of Silicon Valley Bank and Signature Bank.
Last night the foreign markets were up. London was up 0.12%, Paris up 0.51% and Frankfurt up 0.52%. China was up 0.42%, Japan up 0.80% and Hang Seng up 0.60%.
Futures are flat. The 10-year is off 2/32 to yield 4.46%.
