After the number: Strong am I with the Force, but not that strong

So much for my morning prediction. There is extensive commentary on the street that says this number isn't strong by any means. The manufacturing report also showed a lot of inventory building and was positively impacted by higher oil prices. So none of these reports are good. I think the flattish stock market now makes more sense than how we opened.

What I said in April still stands. I think employment is the most over-rated statistic as far as making investment decisions.

That being said, if job losses putz around at -75,000 for a few months and then recover, that would be a very mild recession. I think the recovery will be tepid, slowed by both Fed hikes and consumer weakness. Consumers are going to have to spend a long time repairing their balance sheets.

So the bottom line is that I'm willing to add duration in spread product at higher rate levels. I'm starting to sour on the steepener trade, and will move to a flattener outright if we keep seeing better economic numbers.