That jobs report wasn't a mixed bag is was putrid. The expectation was low and missed by double digit percentage and the last two months were revised down by 89k. That brings total revisions for the year through 8 months to 365,000 which means that over 20% of the jobs originally reported NEVER happened. There is something fundamentally broken (either through intentions or incompetence) going on with the BLS and it's all coming through the birth/death model in small business. Which you can see as it's constantly at odds with ADP.
JOLTS on Wednesday was revised down and at lowest level since 2009 (excluding covid b/c it's insane not to). Quit rate is lowest since 2014. Hire rate is low. To the extent that unemployment went down from 4.3% to 4.2% it is nothing more than people giving up working.
I took a strong position at polymarket on 50 bip rate cut when it was trading at 16% (like 2 weeks ago). It's now at 35%. 5 of the last 6 initial cuts were 50 bips. I don't see any particular reason why this is different. I'm selling everything over my initial investment so that's all I have at play right now so I'm in the black already and can't lose, but I expect to ride this all the way to 100 or 0. I think it's 50 but who knows.
I'd also buy futures at 3, 4 & 5 rate cuts for the year which you can get at 28, 25 and 21 respectively right now. If any of those hit that's a profit. Gun to my head I'd be on 4, but I think 5 is more likely than 3. They call every 25 bips a rate cut in the market- so if it goes 50 bips on 9/18 they will call that 2 rate cuts.
Put another way- they have 3 meetings left- I absolutely believe they will cut at all 3 of them. My guess would be 2, 1, 1 for 4, but I could see 1,1,1 or 2,1,2 if the bottom really falls out between here and there.
my bet is 10-12 cuts between here and the end of this economic cycle, but I don't think you can actually bet on that.