Soft Landing Remains In Play and Bullish

The S&P 500 is taking a rest just north of 4550 and south of 4600. Stock investors are waiting for November's jobs report on Friday to decide what to do next. Meanwhile, bond investors aren't waiting to buy more bonds. They liked the latest batch of economic indicators and drove the 10-year Treasury bond yield below 4.25%. Here is a brief overview of the latest bond-friendly indicators:

(1) Citigroup Economic Surprise Index. Several of the latest economic indicators were weaker than expected. That's reflected in the recent drop in the Citigroup Economic Surprise Index (chart). The 13-week change in the bond yield is highly correlated with the CESI.

(2) Job openings. There were 8.7 million available jobs in October, according to today's JOLTS report. That's 1.3 jobs available for every unemployed person (chart). It’s the lowest number of job openings since March 2021. It confirms that the labor market is cooling and suggests that wage inflation will continue to do the same.