With all eyes glued to Friday's payrolls report, we thought it worth reiterating some 'facts' about US employment data. As ECRI notes, the sustained decline in the official jobless rate – now approaching the Fed’s estimate of “full employment” – is a misleading indicator of labor market slack. The data shows that the so-called jobs recovery has been spearheaded by cheap labor, with job gains going disproportionately to the least educated — and lowest-paid — workers. This is scarcely a good basis for resilient consumer spending driven by “solid” job growth that the consensus – including the Fed – is banking on.
With Crude ramping, dragging stocks with it (as USDJPY is dead now) but not really gaining much ground, it was only a matter of time before the manipulators turned to their oldest-trick-in-the-book:
*NASDAQ, NYSE EXCHANGES DECLARE SELF-HELP AGAINST CBOE
VIX is gapping lower... Mission Accomplished
The Italian, Hungarian, Greek etc. governments should issue rail tickets from their countries to Brussels and tell the refugees that that’s where the European capital is, and to apply there for visas, asylum, and everything else. Let’s see how Brussels deals with 50,000 -100,000 people in its streets and parks, with more coming every day, while the whole world is watching live on a hundred new channels. Brussels lives by the adage of divide and rule. And that serves only the bureaucrats that inhabit the institution. Not the refugees, and not the people of Europe.
"China is imposing fresh controls to prevent too much money from leaving the country, in an effort to keep badly needed funds at home to battle a deepening slowdown in the world’s No. 2 economy." This is undsiputedly bad news for China, but Blythe Masters would be the first to admit, escalating Chinese capital controls would be just the thing bitcoin needs to surge, and surpass, it previous all time highs...
Something is afoot as de-dollarization escalates around the world. With CNY/RUB trading volumes up a stunning 400% year-over-year to record highs, and hot on the heels of China's (and much of EM Asia) dumping dollar assets, Russian President Vladimir Putin has just unleashed a new bill aiming to completely eliminate the US dollar from the trade of goods.
Americans' views on Democratic front-runner Hillary Clinton have gone under water, nearing an all-time low in ABC News/Washington Post polling. Favorability taps into a public figure’s basic overall image, with as Langer Research details, a negative score indicating thin ice. This last few weeks has seen Hillary Clinton's poll numbers indicate she is on thinner and thinner ice. Clinton’s favorability has been especially uneven, from as high as 67 percent favorable during her tenure as secretary of state to as low as 44 percent in spring 2008 and 45 percent now. Perhaps most worrying for her 'people' is the fact that Clinton was somewhat better rated at roughly this time in the 2008 cycle. It seems #BlackLiesMatter after all.
When the bubble vision stock peddlers get desperate, they talk decoupling. So by the end of yesterday’s bloodbath you would have thought China was on another planet, and that “commodities” were some trinket-like collectibles gathered by people who don’t wear long pants, drink coca cola or jabber on their cell phones. On these fine shores, of course, its all awesome from sea to shinning sea. So don’t be troubled. Buy the dip.
Mario Draghi and the ECB have a habit of patting themselves on the back when it comes to what they imagine the happy outcomes of their monetary policy decisions have been. In fact, they have a habit of congratulating themselves on positive outcomes even before said outcomes have been observed or have even had time to play out. This time around unfortunately, "the failure looks clear."
Oil Triple Whammy: Inventory Build, Iran Nuke Deal Has Votes, & China Gives Venezuela $5 Billion LoanSubmitted by Tyler Durden on 09/02/2015 - 10:38
Following last night's epic inventory build., according to API, DOE has reported a 4.7mm barrel build but US crude production pluinged 1.4% (lowest since March). However, ths oil complexc has been hit by two other 'issues' this morning as Obama captures the votes he needs to confirm the Iran nuclear deal (guaranteeing more oil supply) and China encumbers more Venezuelan oil ($5bn loan) allowing them to keep pumping at below-cost levels. The reaction for now is notable selling pressure...
After last Friday’s GDP print which confirmed that Brazil slid into recession during Q2 - a quarter in which Brazilians suffered through the worst inflation-growth outcome in at least a decade - and after July’s budget data which confirmed that the country’s fiscal situation is a veritable nightmare, we got a look at industrial production today and boy, oh boy was it bad. So bad in fact, that it missed even the lowest analyst estimate.
US Manufacturers saw new orders rise at a modest 0.4% in July (missing expectations of a 0.9%). However, year-over-year Factory Orders crashed 14.7% (thanks in large part to last year's Boeing order dropping out of the cycle). But even ex-Transports, New orders tumbled 0.6% in July and plunged 6.9% YoY. This is the 9th month in a row of YoY drops and is without doubt signalling an imminent US recession...
Europe's refugee crisis just took a dramatic turn for the worse, and strikes at the very hear of Europe's Shengen customs union which has allowed borderless travel within Europe for decades. As Bloomberg reports, the Italian Province of Bolzano in Northern Italy said in a statement that it agreed with the Italian government on request by German Federal State of Bavaria by "communicating a willingness to restore border controls at Brenner and temporarily suspend the Schengen agreement."
By turning the health of the economy into a reflection of the stock market, the Status Quo has made the stock market into the one bellwether that matters. In effect, the stock market is now integral to the economy as a measure of sentiment and evidence that all is well with the economy as a whole.
If there is one thing more or less guaranteed to create a bullish scenario for stocks, it is the sudden flip-flop of world-renowned newsletter writer Dennis Gartman once again to a short-of-stocks position. Worse still, his fellow newsletter writers, according to AAII, have not been this 'unbullish' since the trough in March 2009. Of course, what many are missing this morning isd 120 points of The Dow's gains are due to the panic-intervention by The BoJ at last night's Japan open...
Unit Labor Costs dropped 1.4% in Q2, missing expectations of a 1.2% drop and falling to the lowest since Q2 2014. Despite all the sound and fury and wage growth looming any minute now... it is not! This is the first consecutive drop in unit labor costs since Q4 2008.