July 6, 2023 | Daily JAM, Morning Briefing |
Earlier this week economists were projecting the official government jobs report due on Friday, that is tomorrow, would show that the U.S. economy added just 200,000 jobs in June. This morning, however, the ADP Research Institute’s survey of private employers showed the economy added 497,000 jobs in June. That’s more than twice the 220,000 gain that economists had projected for this report. And way above the 267,000 jobs reported by this survey in May.
July 3, 2023 | Daily JAM, Morning Briefing, Short Term |
I think the Friday, July 7, jobs report for June will be decisive in the Federal Reserve’s Jury 26 decision to raise/not-to-raise its benchmark interest rates. The CME FedWatch Tool current calculates the odds of a 25 basis point in create at 86.2%. The Bureau of Labor will release the Employment Situation Report on Friday. Economists are projecting that the economy added just 200,000 jobs in June. In May the economy added 339,000 jobs. Economists product that the unemployment rate will hold steady 3.7%.
June 29, 2023 | Daily JAM, Morning Briefing, Short Term |
This morning all the way in New York I could hear the gnashing of teeth from Jerome Powell’s office at the Federal Reserve. “What do we have to do to slow consumer spending in the Untied States?” he cried after this morning’s economic data. Today the Commerce Department sharply raised its judgement on first quarter GDP growth. The last revision to the data showed the U.S. economy growing at a 2% annual rate from January through March. That was a huge step up from the 1.3% growth repoRrted in the previous GDP estimate.
June 28, 2023 | Daily JAM, Short Term |
Investors and traders have been riding a Goldilocks market that has rested on a belief that all news is good news. There are signs that belief is facing challenges that might, just might, lead to a replacement of Goldilocks with some other narrative. Right now, the golden child is still resting peacefully at the Three Bears’ house with a stomach full of “just right” porridge, but sentiment in the last week has at least been willing to countenance the possibility that some bad news is bad news. And, I can see a lurking suspicion in the market that may be in the weeks to come all news if bad news.
June 21, 2023 | Daily JAM, Morning Briefing |
Recently former Treasury Secretary Larry Summers has been saying that the June pause in interest rates and a simultaneous increase in the end of the year DotPlot interest rate projections to 5.6% only makes sense if Fed chair Jerome Powell cut a deal with the central bank’s inflation hawks that guarantees a 25 basis point interest rate increase at the July 26 meeting.
June 14, 2023 | Daily JAM, Morning Briefing |
As expected, the Federal Reserve’s Open Market Committee held the central bank’s benchmark interest rate steady today at 5.0% to 5.25%. But the Fed in its meeting press release and Fed chair Jerome Powell’s press conference stressed that its inflation fight isn’t over. That the market could see another interest rate increase at the July 26 meeting. And that the market should not expect a pivot to interest rate cuts anytime soon.
June 10, 2023 | Daily JAM |
This week brings potentially market-moving doses of news on inflation and interest rates. First up, inflation. On Tuesday, June 13, the market will get the report on CPI (Consumer Price Index) inflation for May. Economists project that, because of falling gasoline prices in the month, all-items headline CPI will show just a 0.2% increase in month-to-month inflation in May and just a 4.1% year-over-year inflation rate. That would be the lowest annual inflation rate since March 2021. The core rate, however, is expected to climb at an annual 5.3%. And then on Wednesday, the Fed meets on interest rates.
June 5, 2023 | Daily JAM, Videos |
Today’s Quick Pick is 2 Year Treasuries. Ten-year Treasuries with a 5% yield may still be a long way out, but Two-year Treasuries now have a yield of 4.5%. Rates may continue to go up in the short-term and the Fed is likely going to raise interest rates again in June or July, but this is a good place to start a position in these Treasuries. You can, of course, get a CD with a 5% yield, but the CD won’t earn you capital appreciation. If rates go down when the Fed stops raising rates, treasury yields may go down, but the bond may go up. We’ll likely see a peak in rates in the third quarter, so at the moment, I think Two-year Treasuries are a good buy.
June 2, 2023 | Daily JAM, Morning Briefing |
The U.S. economy added a monster 339,000 jobs in May. Economists had been looking for 180,000 to 190,000 jobs. On the news, stocks rallied. Strongly. The Standard & Poor’s 500 closed up 1.45%. The Dow Jones Industrial Average ended the day 2.12% higher. The NASDAQ Composite added 1.07% and the NASDAQ 100 finished up 0.73%. The small-cap Russell 2000 moved higher by 3.56%. So why did stocks move up?
June 1, 2023 | Daily JAM, Morning Briefing |
What’s the difference between a “skip” and a “pause.”
That’s the question the Federal Reserve has posed to the financial markets today. Fed Governor and Vice-chair nominee Philip Jefferson said today that any decision to hold rates steady should not be viewed as the end of the tightening cycle. Coming just two days before the beginning of the Fed’s pre-meeting quiet period, Jefferson’s comments are being seen by the market as a preview of the Fed’s action at its June 14 meeting.
May 31, 2023 | Daily JAM, Morning Briefing |
The latest Job Opening and Labor Turnover Survey, or JOLTs report, released yesterday, May 30, Tuesday, showed 10.1 million job openings at the end of April. That was an increase from the 9.8 million in job openings reported in March. Economists surveyed by Bloomberg had expected 9.4 million openings in April. This higher-than-expected number has, this morning, led to fears that the labor market is still stronger than the Federal Reserve would like. Which could lead to a Friday report of a stronger-than-expected jobs report for May. And a Federal Reserve interest rate increase at the central bank’s June 14 meeting.
May 27, 2023 | Daily JAM |
You’re entitled to feel a bit (or more) of debt ceiling fatigue. For a change of pace, look to Friday, June 2, when the Bureau of Labor Statistics releases its jobs report for May. Economists project that the U.S. economy added fewer than 200,000 jobs in May. That would be a big dip from the average monthly gain of about 370,000 over the last year. Average hourly earnings are forecast to have increased by 0.3% in May from April.
