What a wild session on Friday. The market popped on enough signals in the jobs report to suggest the Fed should be happy with their handiwork. There wasn’t a sense this month’s rate hike was going to be less than 75-basis points (bps); I just thought there were more and more signs of the economy slowing.

Each unemployment rate classification moved higher:

• U1 1.2% from 1.1%
• U2 1.7% from 1.6%
• U3 3.7% from 3.5%
• U4 3.9% from 3.7%
• U5 4.5% from 4.4%
• U6 7.0% from 6.7%

Black unemployment, 6.4% from 6.0%, is now 100% higher than White unemployment at 3.2%. As for labor force, 786,000 returned, but employment only gained 442,000. Multiple jobholders continue to march higher now to 7,747,000 or 4.9%.

Of course, the financial media cheered the report, and perhaps that triggered ‘algos’ to sell, but the downside basis was already strongly entrenched.

Market Pulse

Market Breadth was negative, although not to the degree one might have imagined.

Heat Map

Energy (XLE) continues to be the new safe haven as Utilities (XLU) are expensive, and Real Estate (XLRE) has its own developing issues.

That green patch was XLE, although the earnings beat at Broadcom (AVGO) is a reminder Tech in general and Semis, in particular, are oversold.

Portfolio Approach

There are no sector weighting changes this morning in our Hotline Model Portfolio.

Today’s Session

Major focus on the energy crisis in Europe and more lock downs in China.  Meanwhile, the ten year yield continues to edge higher.

I’m glad the market is opening higher but won’t take the bait.  That reversal last Friday was an eye-opener.

Still, major indices are ranged bound; although, virtually all the talk on the street is for the market to move lower.