A week filled with significant events impacting the markets culminated in an unexpectedly strong September jobs report.
Government Shutdown Averted; House Ousts McCarthy: The U.S. Congress managed to avoid a dramatic government shutdown just hours before the midnight deadline Oct. 1 by passing a stopgap funding bill. This bill ensures the continuation of government operations through Nov. 17, excluding new funding for border security and Ukraine. On Tuesday, the House of Representatives made a historic decision to oust Speaker Kevin McCarthy, following a motion initiated by Rep. Matt Gaetz (R-FL) in response to McCarthy’s collaboration with Democrats to prevent a government shutdown.
Treasury Yields Surge, Bond Market Turmoil Persists: Throughout the week, yields across the Treasury curve continued to rise. The 10-year Treasury yield surged past 4.75%, reaching its highest level in 16 years. On Friday, the 30-year yield crossed the 5% threshold, driven by a jobs report that exceeded expectations. Funds and ETFs investing in long-dated Treasury bonds such as the PIMCO 25 Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (NYSE:ZROZ) or the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) have now lost more than 50% of their value since March 2020.
Non-Farm Payrolls Significantly Exceed Estimates, Indicating Strong Labor Market: The September jobs report showed stronger-than-anticipated employment growth. Non-farm payrolls increased by 337,000 last month, marking the largest monthly gain …
