The “Trade War” talks continue to dominate the market action this week, creating volatile swings in energy and equity prices as traders switch from risk on to risk off and back again depending on the latest headline. There’s no shortage of articles filled with guesses on the winners and losers in the high stakes game of chicken being played by US and Chinese leaders, it’s increasingly difficult to know what might be a meaningful change, and what’s just a bunch of hot air.
The March jobs report was a bit slower than the previous couple of months with just 103,000 jobs added vs revised estimates of 326,000 in February and 175,000 in January. The Headline unemployment rate held steady at 4.1%, while the U6 rate dropped from 8.2 to 8.0%. Stocks and energy prices saw a very small dip in the minutes following the report, but there’s a chance we could see a rally off these numbers as the “Bad news is good news” camp reacts to the chance that this slowdown could give the FED pause in its monetary tightening plan.
The political theatre surrounding the Renewable Fuel Standard continued its nationwide tour this week. RIN values plunged to a 2 year low Wednesday following reports that the EPA had granted Andeavor exemptions to the RFS for 3 of its smallest refineries several months ago. Not surprisingly, biofuels groups were up in arms over the report.