This Is The Fed's "Second Biggest Nightmare" According To Citigroup

Two weeks ago, Citigroup presented what it thinks is the biggest nightmare for the Fed: it said that the FOMC’s "biggest worry is not lift off and its market and economic implications, but what happens if the economic recovery dies of old age without the Fed having done anything to tighten." And, according to Citi's FX strategists, "if this were to occur, the USD would probably fall faster than it rose from July-March." A precursor to loss of faith in the Dollar's reserve currency status perhaps. Today, Citi's Steven Englander lays out what is the Fed's second biggest nightmare: a rebound which is so fast, the Fed's entire carefully planned renormalization schedule collapses.

Bill Dudley Says Fed "Still Likely To Start Raising Rates This Year"

Just in case there was some confusion how to read today's blistering jobs data, here comes NY Fed's head and former Goldmanite with the explanation:

DUDLEY SAYS FED STILL LIKELY TO START RAISING RATES THIS YEAR

His comments initially pushed futures to the lowest since this mornings furious ramp to green  but since then ES has managed to rebound modestly and is now unchanged since the speech because it is clear that the Fed is just as clueless as everyone else what to do.

Rick Perry Spent 27 Times More Per Vote In 2012 Than Clinton Did In 2008

If Rick Perry wants to mark a successful comeback in 2016 and spoil Hillary Clinton's inauguration, he'll need to be a bit more efficient with his campaign dollars. Despite spending less in his 2012 bid than nearly every other 'serious' candidate in the last three elections, Perry paid 27 times more per vote in 2012 than did Clinton in 2008.

The Incredibly Bearish Bull Market

Currently, there are things occurring that are very troublesome, and in more normal times, would likely already have investors heading for cover. However, in today's liquidity fueled, Central Bank supported environment, that has yet to be the case. The reason was best described recently by Dr. Robert Shiller "I call this the 'new normal' boom ó it's a funny boom in asset prices because it's driven not by the usual exuberance but by an anxiety." What happens next is only a guess. However, historically, it hasn't been the outcome that investors were hoping for. But then again, maybe "bearish bull" isn't as much of an oxymoron as it is just a warning.

Futures Storm Into The Green, On Verge Of Regaining 2100

When the "better than expected" jobs data came in, equity futures (alongside crude, precious metals, and bunds) promptly tumbled on fears the Fed rate hike, which many had expected would take place in September was pushed forward to July, or even the current month. However, starting with the market open, the E-mini has seen a relentless bid higher, and as of moments ago, it finally ticked into the green, covering nearly 17 points from the lows in less than an hour.

Where The May Jobs Were: Teachers, Waiters, Retail, And Temp Help

One of the defining features of jobs "recovery" and the main reason why wage growth has been so far below the Fed's expectations for years it has prevented wage inflation from appearing despite years of QE, is that the quality of jobs added month after month has disappointing. May was no difference. Yes, the headline print of 280K job additions was great, but a quick look at how the BLS got there shows that nothing has changed because four of the five main job additions were, as usual for the lowest paid jobs.

Walmart Chairman Steps Down As Amazon Market Cap Breathes Down Retailer's Back

Moments ago, the biggest single employer in the US after the Federal government, with 2.2 million workers, surprised its shareholders when it announced that Rob Walton, who had served as Chairman of the Board since 1992, was stepping down (he will stay on as a director) and would be replaced with vice-Chairman Greg Penner, grandson of founder Sam and son in law of Rob, who started his career at Goldman Sachs before joining WMT as a management trainee.

May Wage Growth Concentrated Among "Supervisors, Bosses"; Full-Time Jobs Still Below 2007 Peak

The one data point in today's otherwise impressive jobs report which may generate some skepticism about an imminent rate hike is that while full-time jobs did grow at a brisk 630K pace in May as part-time jobs this month tumbled, the total number of full-time jobs at 121.4 million is still about half a million below their pre-recession peak of 121.9 million reached in November 2007.

"Good" Jobs Reports Sparks Market Turmoil As Rate Hike Draws Closer

Despite the rise in the unemployment rate - which by now become nothing more than a joke - the jobs report (at the headline level) was too good for the bulls demding moar for longer. The kneejerk reaction was a selloff in bonds, commodities, and stocks as the dollar surged amid rate hike delay hopes. As time passed stocks bounced back a little but bond yields and the dollar continue to press notably higher and crude has given up all its OPEC gains.

US Adds 280K Jobs In May, Much Higher Than Expected, Yellen Gets Green Light To Hike

Contrary to expectations of a modest 226K increase in nonfarm payrolls, according to the BLS in May the US added a whopping 280K jobs, with the April print revised from 223K to 221K, but March revised higher from 85K to 119K. This was the highest monthly increase in payrolls since December of 2014.  The unemployment rate rose from 5.4% to 5.5% on the number, as the number of employed Americans according to the Household Survey also rose by an almost equal 272K.

OPEC - As Expected - Maintains Production At 30 Million Barrels, Crude Pops

When OPEC did not cut production last November, the oil market collapsed in shock and awe that the cartel would not just give in and allow non-OPEC members to walk away with market share. Today, in Vienna, "exactly as expected," OPEC once again confirmed production will remasin at 30 million barrels per day in the face of the global oil glut and prices for WTI and Brent have jumped $0.50 to $1.00 (we presume on machines and removal of a worst case boost to production).

Tsipras Plays Putin Pivot Card; Tests Parliament's Patience On Troika Proposal

Greek PM Alexis Tsipras is set to address parliament Friday as difficult discussions with creditors have reached yet another stalemate. In Germany, some reports suggest there's now tension between German Chancelor Angela Merkel and FinMin Wolfgang Schaeuble regarding how the EU paymaster should handle Greece going forward. Meanwhile, Tsipras and Putin will hold a phone call Friday to discuss "business and energy." 

Frontrunning: June 5

  • Europe shares set for worst week of 2015 (Reuters)
  • Jobs Report Not Likely to Trigger June Rate Hike (Hilsenrath)
  • U.S. jobs market seen firming despite lackluster growth (Reuters)
  • Gross Says Bond Rout Scary as Hell Even Without Bear Market (BBG)
  • Apple Is the New Pimco, and Tim Cook Is the New King of Bonds (BBG), which ZH said in 2013
  • In 'year of Apple Pay', many top retailers remain skeptical (Reuters)
  • OPEC Nations Signal Few Prospects for Oil-Production Change (BBG)
  • China regulator says amending rules on margin trading, short selling  (Reuters)

What Wall Street Expects From Today's Payrolls Number, And Why It May Be Overly Optimistic

The most important not yet double seasonally-adjusted economic datapoint is upon us: in 90 minutes the BLS will report the May payrolls number which consensus expects to rise by 225K, (range of 140K to 305K), barely unchanged from April's 223K. The meaningless unemployment rate is expected to remain unchanged at 5.4%, even as the number of people not in the labor force likely will rise to a new record high. The most important variable, however, will be the hourly earnings with consensus expecting a 0.2% increase for all workers (the non-supervisory workers category is a different story entirely), up from the 0.1% increase in April.

Futures Slump, Bund Selling Resumes With All Eyes On The Jobs Number

After yesterday's unprecedented volatility fireworks across all markets and continents, today so far has been a modest disappointment, with no crashes and subsequent surges in China, where the Politburo's only achievement was keeping the bubble dream alive by pushing the Shanghai Composite over 5,000 for the first time since January 2008, closing the index 1.5% higher on the day - a very modest gain by China's recent blow-off top standards.  Europe, too, has been relatively tame with the 10 Year Bund starting off on the wrong foot, the yield rising back above 0.91% before once again dipping to the upper 0.8% range, tracking the move in the EURUSD tick for tick, which also is a tractor beam for the US 10 Year. On the equity, front, things are just as muted, with futures at the Low of Day as of this moment, despite yesterday's last minute manic buying spree, the S&P set to open below 2100 as a result.

Tyranny: It Pisses Me Off

In fact, the most despicable forms of tyranny are often the most subtle; the kinds of tyranny in which the oppressed are deluded into thinking that because they have “choices”, that necessarily makes them “free”.