Good morning. There are modest gains in stocks this morning following a December jobs report that was weaker than expected. So why might markets have reacted positively? It is believed Fed members wanting to cut rates now have more ammunition – though one governor’s comment that 150 bps (1.50%) is in order is right now not being taken seriously. But that can change. As far as the unemployment report was concerned, a bright spot could be the reduction in the unemployment rate to 4.4% … but this is being overshadowed by the revision of previous month’s results that seem fairly substantial. One concern was removed from today’s activity as a lot of focus was placed on an expected Supreme Court decision over the legality of the “Trump Tariffs” … but the Supremes only gave one opinion today … and the next one (for which the topic is unknown) is not expected until Tuesday. The housing market … or rather, a move that can affect the inventory and affordability of the housing market … could get a small boost as the President announced an order for Freddie Mac and Fannie Mae to purchase up to $200 billion dollars in mortgage bonds. The goal? Since bonds have an inverse relationship with rates, this purchase could lower borrowing costs for mortgages. To what extent? The head of U.S Rates Strategy at TD Securities, Gennadiy Goldberg, thinks we would see a 0.25% decline. I must admit in finding tech innovation fascinating, but I might be showing signs of “new technology fatigue.” I’ve been typing my note this morning and find my cursor occasionally disappearing … and the Word program attempting to complete sentences … forcing me to play games with my “mouse” to allow me to pick up where I left off. Then, last night, I had another interesting thing happen. Typically, I press a button in my car, and a verbal instruction allows me to give an address … with directions immediately coming up on a map. But I tried it last night, my entire screen changed and was taken over by a Chatbot called “Grok” … making things much more … um … challenging. Yes, I updated my car’s software recently, but it automatically put in this “AI-powered conversational assistant.” I don’t know if this is good or bad but assume it will just take time to get used to. I mean, Alexa took me over a year for it to gain my confidence and comfort … but even that is staring to get a little bit too much in the wise-cracking department. I was cooking last night and asked Alexa a quick bread recipe … and was told that she must keep it a secret … … as the sourdough recipe was strictly on a “knead to know” basis. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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