Yesterday’s trading session was mixed. Following a disappointing retail sales number Treasuries rallied and added to Monday’s gains that followed Kevin Hassett talking down labor data expectations. The rotational activity in equities continued with the S&P 500 ending down 0.3% while the equal weight was up a similar amount. Financials underperformed after brokers/wealth managers became the most recent group hit with the rolling AI disruption concerns as Altruist launched a new tax planning offering within its AI platform.

Equity futures were slightly higher ahead of this morning’s labor data while Treasury yields were a touch lower. Fair to say Hassett didn’t get a sneak peak before he talked down expectations. The headline nonfarm payroll number was hot, coming in well ahead of expectations, up 130k versus a 70k expectation and last month’s 48k. Private payrolls were up 172k while government jobs fell 42k. Over two-thirds of the private jobs added were in healthcare and social assistance, but Construction and manufacturing also added jobs.

Futures popped on the jobs data and the S&P opened 0.5% higher but equities didn’t last at that level for long and started to come in just after the Opening Bell. 7000 once again was a clear wall of resistance for the S&P, though it has also held its 50d ma ~6895. The index is around flat now. The equal-weight is slightly better while small caps are pressured as rates drive higher. Dow Transports are leading though airlines are weak. Overall, 8/11 sectors are higher. Value is leading Growth and Energy is the best sector as crude continues to climb. Comm Services, Discretionary, and Financials (entire industry red except Insurance) are weighing on the index. Semis are trading well (ICE Semis +2%) and software is getting clipped again (IGV -3%) in Tech.

Treasury yields jumped on the employment print but have come in from their highs. However, a 10y auction tailed by 1.4bp later in the day. That pushed longer yields back up a couple bp. Currently the 2y is up 4bp, 10/30y up 2-3bp. Fed expectations have repriced, with an April hold back around 75% chance after dipping to ~58% yesterday after Hassett and others talked down expectations. The USD index is around unchanged after bouncing between 96.30 and 97.15.