Tariffs, Treasuries & Turmoil – Oh My!
What to know about this week’s market moves.
Join me in our ‘Weekly Market Update’ to decipher what to expect in the coming weeks & months.
Happy Friday! Brian Manning here with the weekly update. Let’s get right to it.
Monday of this week, tariffs, tariffs, tariffs. All the talk was on tariffs and what was happening over the weekend. I don’t know what to think of this right now. Supposedly, these tariffs are for a drug war and to prevent fentanyl from coming into the U.S., but it’s hard to know what the facts are there. All I know is that I think there’s some, I don’t wanna say misinformation about tariffs, but the reality is if we have tariffs on products that come in through China, Mexico, and Canada we as consumers pay the import tax when those goods come in. There are a lot of people out there who feel that tariffs would not have a positive impact on the U.S. economy because we all incur higher costs on the goods that have tariffs attached to them. So we’ll have to wait and see what happens. Unfortunately, tariffs could lead to negative economic conditions because if the cost of goods is already high and then you put tariffs on them, the cost of certain goods goes up even more, and that could hurt the U.S. economy.
Tuesday we get the JOLTS report. This stands for job openings and labor turnovers. This looks at how many jobs were posted in the U.S. We had 7.6 million jobs that were posted, a decline of 550,000 jobs from a year ago. This number is down 1.3 million. So, it’s really hard to get a good feel for the U.S. economy as far as employment is concerned. The JOLTS report is tough for a couple of reasons. One, companies can post multiple jobs to try and make their company look stronger and like they’re experiencing growth. Also, companies can post jobs in multiple places because of the amount of people who work remotely now. So, you could have one job that gets promoted or advertised in two, three, or four places, and each posting gets counted in there. A lot of people believe the JOLTS report is not as robust as it seems just based on the numbers. It still puts us into question how employment looks in the actual footing of the U.S. economy.
Wednesday this week, we got ADP. I can’t believe it’s the first week of February! On the first Wednesday of every month we get ADP. They’re the largest provider of private payrolls in the U.S. 150,000 jobs were anticipated from this report. We got 183,000. Certainly a little bit better than expected. Also on Wednesday, Treasury Secretary Scott Bessent spoke about the issuance of the treasury. When the U.S. government and the country incur debt, the way they have to pay for it is by putting treasuries into the marketplace. This is probably part of the reason why we’ve seen mortgage rates move higher. But, mortgages are a form of treasury as well. So now you have mortgage-backed securities going into the marketplace. So you got a lot of, we’ll call it flooding of securities in the marketplace, whether it be treasuries, mortgage-backed securities, etc. When you have more supply than you have demand, the cost has to go up. It’s part of the reason why we’ve seen higher mortgage rates. Well, Scott Bessent came out and said, for the foreseeable future, they’re not gonna issue long-term treasuries. They’re gonna focus on issuing short-term treasuries and the markets like that. We actually saw a little bit of improvement in interest rates this week. This is because investors realize that there’s not gonna be as much competition out there for long-term yields. If the treasury department is issuing short-term treasuries and then you have long-term mortgage-backed securities, that could balance out the marketplace there, it could be helpful for interest rates. So the financial markets definitely liked what Scott Besson, our treasury secretary is doing.
On the first Friday of every month, we get the BLS report. That stands for the Bureau of Labor Statistics. This week’s report expected 170,000 new jobs to be created. We got 143,000. We also saw the unemployment rate move from 4.1 down to 4.0. So a little bit of move there. The markets are kind of conflicted by this information. If you look at the report, it’s a little bit all over the place, but right now it seems relatively flat as far as the employment report is concerned.
I’m around all weekend. If you have any questions, let me know. Realtors, we are hosting Winning the Listing Presentation. We’ve done Boulder, we’ve done Denver, we’ve done Fort Collins, we have Colorado Springs next week. That class is almost sold out. Then we’re gonna go through and cycle a couple of cities again. We have tremendous feedback on this luncheon. It’s all about your presentation, compensation on the buyer side, compensation on the listing side, so please, RSVP. We would love to have you there. Also, I’m available seven days a week, 8:00 AM to 8:00 PM, if you have any questions, reach out to me anytime.
Happy Friday. Have a great day.
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