It’s hard to drive looking in the rear view mirror. Regardless of what’s behind us, it’s what’s in front of us that determines the direction we’re headed.

Oil & the Strait of Hormuz

Oil prices are trading just below $90/barrel, even though more than 17 million barrels passed through the Strait of Hormuz on Monday. That’s actually a good sign, it’s the most since the conflict began.

ADP Employment Report

ADP released its August Employment Report, showing just 38,000 jobs created, well below estimates of 53,000. The labor market continues to soften. Let’s break that number down.

All of the job gains came from Education/Health Services, which added 45,000 jobs. But hang on, if that’s the case, how did ADP land on a total of 38,000? Simple: every other sector combined lost 7,000 jobs.

The Fed has an unhealthy view of the job market. NY Fed President John Williams, a voting member, said this morning that he believes the “labor market is solid.” What?

Mortgage Applications

Mortgage application volume is flat, with rates holding at about 6.79% nationally. Refinances made up 42% of total transactions, with most of those being cash-out refis. This is a bit of a troubling sign, I remember the aftermath of the 2008 financial collapse. When debt consolidation starts ruling the roost, it’s the canary in the coal mine.

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