We'd be the first to advocate taking Thanksgiving week trading momentum with a grain of salt, so this morning's discussion is less about drawing connections to market movement and more about the general message in some of the econ data.  In this case, it just happens to advocate for the stronger trading levels.  One of the best indicators, weekly Jobless Claims, is also the most subtle.  It's only up to 240k as of this morning, but that's highest since mid-August, and it contributes to the sense of an uptrend. 

Could this be the start of some softening in the labor market?  If so, that checks one of the two big boxes for the Fed to soften its policy stance.  But admittedly, it's a bit soon to be identifying a shift.  Ideally, there would be more of a sideways range to give traders an obvious baseline against which to measure a breakout.  The best we have at present is the previous high of 260k, which is a far cry from the fairly consistent range ceiling bounces seen before the last major economic shift.

While a break above 260k would certainly be net positive for bonds, the big difference versus 2007 is the presence of an even more important indicator in the form of inflation.  The Fed has been clear that it will sacrifice plenty of labor market strength in the name of fighting inflation.  We also need to specify what we mean by "bonds."  An absence of traction on the inflation front would be far more damning for a 2yr Treasury whereas 10yr Treasuries would be more capable of reacting to other economic data.  Indeed, that's the most obvious reason that the yield curve is more than 75bps inverted this morning.

Other economic data out this morning includes Consumer Sentiment, which paints an even gloomier picture.  A few months ago, we were able to blame a fuel price spike for the lowest levels in 40 years, but today's update follows a big drop in fuel prices and still manages to be the lowest in more than a decade.

The last remaining hurdle for the markets before clocking out for a de facto 4 day weekend (Friday is technically a half day, but...) will be this afternoon's Fed Minutes.  As a reminder, this is only a more detailed account of the Fed meeting that took place 3 weeks ago--NOT a new policy announcement.