Wage Inflation Tempers Bonds

• December 8, 2000
• Marc Dupee

Today’s jobs report showed employment
weakening–unemployment increasing–slightly more than forecast, moving from a
30-year low of 3.9% to 4%. Although this would enhance the chance for the Fed to
ease short-term interest rates from a nine-year high of 6.5%, the uptick in the
wages component of the report hints at wage inflation and reduces the likelihood
off an aggressive loosening (such as a 50 basis-point rate cut) by the central
bank. Federal Funds futures, the best predictor of the Fed’s probable action,
fell slightly.
T-bonds
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10-year notes
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Nasdaq 100 heavyweight Intel
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despite issuing a revenue warning after yesterday’s close. When a Naz bellwether
rallies on bad news, this is a good confirming indication of a market bottom.
Stock index futures have rallied sharply out of the gates with Nasdaq 100 and
Dow futures rallying triple digits. 

Crude oil
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heating oil
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agreed on a price for the sanctioned nation’s crude oil.

Japanese yen
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setup after opening below the prior two days’ lows. 

Coffee, from the
Implosion-5 List,
tumbled to fresh seven-year lows after Indonesia, one of the world’s top
producers, said it would pull out of a coffee retention program after expressing
doubt that Vietnam would adhere to any agreement to keep coffee off the world
market. Coffee has been indicating its strong directional bias by registering
multiple down signals on the
Futures
Trend Matrix.