Non-Farm Payrolls Remain A Distraction, Unemployment Rule Trifecta

The 206K non-farm payroll print is a distraction from reality.

There is a certain level of cognitive dissidence one has to obtain in order to remain both sane and above water in today’s investing environment. We all understand, at least to certain degrees, that the macro landscape has been diverging from equity prices for sometime.

This tends to leave individuals in two buckets: one, those that are unwilling to take the divergence at face value and short every, single new all-time high. The second, those that have such a cognitive dissidence that you merely trend follow without any acknowledgement that we’re clearly in a late cycle environment.

The reason I bring this up is that we need to understand that it’s an acceptable position to understand headline macro prints are a distraction to underlying weakening data while still finding an allocation bucket that accesses further potential upside in risk assets according to ones risk tolerance.

In this note, I’ll be going over the newest payrolls and labor market data underneath the headline and why 25, 50 or 100 bps in rate cuts will not stop what will occur.