Sahm-thing is going wrong
Market reaction to this morning’s non-farm payrolls report looks slightly overdone, with price action heavily position-driven. The long-dollar trade had unquestionably become overcrowded, and many investors are now desperately trying to top-tick long-term yields, with buying activity surging in the belief that they have peaked. Many of the underlying details still look stable, and widespread strike activity through late September and early October likely subtracted more than 50,000 roles from the headline print, leaving three-month job creation rates remaining relatively strong. It is very unlikely that the US economy is currently in recession. The Sahm Rule, named after former Federal...