I pointed out in the morning report that the bond market seemed worried about something, which sent yields soaring.  Today, those yields are plunging and back under key moving averages.  Everything went haywire after the JOLTs report.

On the surface, the report should have been viewed positively, and it is more ammo for the Fed to consider holding off on more rate hikes.  Private sector quits spiked to 2.5% from 23%, led by transportation and warehousing, which leaped to 3.1% from 2.3%.

On the other hand, leisure quits decreased to 4.1% from 4.5%.

But as I looked closer, maybe the market is reacting to this being the second largest three-month decline in job openings ever.  Small businesses saw the biggest drop in job openings.

Wicked Pace of Job Opening Erosion

Meanwhile, banks are on the back foot – big time.

There is lots of focus on commercial real estate. There are issues, but not sure it will live up to the nationwide hype.  But many US cities will never be the same and it’s almost all self-inflicted.

None of this has changed modeling for the FOMC decision tomorrow, where there is a greater than 90% chance for 25 bps rate hike.

The first rate cut, however, is now seen in July instead of November.

These kinds of sessions ahead of the Fed are not unusual, and in fact, they are designed to weigh on the Fed’s decision-making. 

Powell claims he doesn’t look at the stock market, but he does, and today’s action will have an impact.