Wall Street Webcasting Presents: Wells Fargo Securities: “A “Goldilocks” Marriage of an Accommodative Fed & Low Vol Continues as the Economy Shows Signs of Life.”

Thursday’s Nonfarm Payroll’s report afforded some clarity around the improvement seen in the U.S.’s economy. There were 288,000 jobs added to the market in the month of June, marking the fifth straight month of there being over 200,000 jobs added. The unemployment rate also decreased to 6.1%, showing a healthy improvement since last summer. This indicates the strongest growth streak seen in many years.

The upward course of economic growth seems to be offbeat with Fed Chairman, Janet Yellen’s, comments at the recent IMF meeting. She didn’t appear to be overly concerned with the recent increases in the inflation rate, which has moved back towards 2%. The growth rate of average hourly earnings remains near historically low levels, which supports the view that there is still enough slack in the labor market that recent increases in the inflation rate are mostly ephemeral rather than structural.

Different parts of the yield curve are moving in completely different ways. The slope between the intermediate and the long end of the curve has continued to flatten. The 5s/30s spread chart demonstrates that this part of the curve is once again reaching the flattest levels over the past year. Contrariety, the Bank Carry Trade is reaching its steepest levels over the past year.

To hear a more in depth explanation of the booming economic data, please tune into Wells Fargo’s latest video.

Please visit the following link to view the video: