Professor’s Comments November 8, 2013 Job Report

Posted by OMS  at November 8th, 2013

The BLS said that 204,000 new jobs were created in October. The number easily topped economist expectations of 120,000 new nonfarm payroll jobs for the month, though unemployment rose to 7.3 percent.

The higher than expected number of new jobs spooked the Bond market into thinking the Fed will start its tapering program sooner than expected, causing ETFs like TMF and TLT to tumble.

And because Bond prices are falling, interest rates are rising.

Utilities like ED need to borrow a lot of money to operate. They are very dependent on interest rates and because of this, they are are getting hit especially hard today.

I believe that markets reaction to the jobs report is extremely overdone, and that the October number will be revised lower next month.

With the economy facing recession, and people leaving the workforce in droves, I just don’t see the Fed ending its current stimulus program anytime soon.

I’m still looking to add to my position in ED.

TWID,

h

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