Markit

It's All About This Friday's Payrolls: Key Events In The Coming Week

After Friday's Jackson Hole repricing of Fed hike expectations, which made it clear that the fate of a September rate hike is now in the hands of the August payrolls number, the main risk event of the week is therefore this Friday's US NFPs for which consensus expects a reading of 180K, down from last month's 217K print. A number substantially above this will make a September hike virtually certain, and potentially risks roiling markets as good news will likely be bad news this time around.

Recession Odds Spike To 37%, JPM Calculates, Highest Yet For This Cycle

While not as dire as the recent analysis by Deutsche Bank, overnight JPM released its latest recession probability analysis, and - somewhat unexpectedly following the last two stellar job reports and a full court political press that the recovery has rarely been stronger going into the election - now sees a 37% chance of a recession in the next 12 months. This is the highest recession probability calculated by Jamie Dimon's bank during the current economic cycle, and matches the odds first laid out in early July.

Services PMI Tumbles To 6-Month Lows: "GDP Growth Is Failing To Accelerate In Q3"

Following Manufacturing PMI's drop from a two-month bounce, Services PMI also tumbled. Against expectations of a rise from 51.4 to 51.8, Services dropped to 50.9 - lowest since Feb 2016. With the lowest jobs data in 20 months, new orders at their weakest since May, as Markit warns, "GDP growth is failing to accelerate in the third quarter from the weak 1.2% pace seen in the second quarter."

Global Stocks Decline Along With The Dollar, As Jackson Hole Begins

Global stocks declined broadly, led by European equities which fell for the first time this week while currency markets continued their subdued tone even as the recent 4-day rally in the USD appears to have topped out, as investors took to sidelines ahead of the Jackson Hole meeting which begins tonight. Japanese and Chinese stocks had suffered modest drops in Asia.  S&P 500 Index futures slipped 0.2%, continuing yesterday's modest selloff.

US Manufacturing Flashes "Warning Light" As New Orders, Employment Tumble

Following the eurozone's disappointing drift lower in Manufacturing PMI (and weakness in German Services), August's US preliminary manufacturing PMI printed a disasppointing 52.1 (against expectations of 52.6). Weakness in Employment (lowest in 4 months) and New Orders underpin the drop from 52.9 to 52.1 as the 2 month hope-fueled bounce has faded...

Stocks Creep Higher As Dollar Resumes Falling, Oil Slides For Second Day

While the summer doldrums continue, with little market-moving newsflow overnight and zombified volumes, US futures crept higher and European shares rose after EU PMIs printed modestly better than expected, while a return to dollar weakness pushed emerging markets higher, even if it failed to boost oil which as we noted last night was downgraded by Goldman on various fundamental reasons.

Jackson Hole Looms: The Main Events In The Coming Week

The key economic releases this week are new home sales on Tuesday and durable goods on Thursday. However, the main event in what is one of the slowest summer weeks, will be the Jackson Hole symposium starting this Friday, where focus will be on Yellen's speech who will be scrutinized to see if she can bring the Fed's message back on track after several conflicting statements by Fed speakers in recent weeks.

US Futures Flat; Bonds Rise, Dollar And Oil Slide Over US Productivity Collapse Fears

Following yesterday's muted action which saw the S&P500 close unchanged, it has been more of the same listless trading overnight, with US equity index futures little changed as the Nikkei fell on the back of a stronger Yen, while government bonds rose and European stocks reversed early gains following the BOE failed bond monetization operation. Crude oil dropped for a second day after Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day,

The Charade Continues: London Gold And Silver Markets Set For Even More Paper Trading

Today the London Metal Exchange (LME) and the World Gold Council (WGC) jointly announced the launch next year of standardised gold and silver spot and futures contracts which will trade on the LME’s electronic platform LMESelect, will clear on the LME central clearing platform LME Clear, and that will be settled ‘loco London’. Together these new products will be known as LMEprecious.’

"Something Is Not Right"

Overall, the “mixed signals” backdrop that has been in evidence for quite some time continues to prevail. And yet, we can see that a number of data points remain quite weak or are deteriorating further (particularly RGPDI). Strong payrolls data are not a reliable indicator of future economic growth – and considering that money supply growth remains at more than 8% y/y, current economic data look actually exceptionally poor (normally more pronounced boom conditions would be expected). Any slowdown in credit growth will quickly sink the good ship US economy.

S&P To Open At New Record High As Commodities Rise, China Trade Disappoints

The meltup continues with the S&P500 set to open at new all time highs as futures rise 0.2% overnight, with European, Asian stocks higher, as job data pushed MSCI Asia Pacific Index towards highest close since Aug. 2015. Germany, U.K. economic data seen positive, with dollar, oil rising, and gold declining. The MSCI All-Country World Index rose 0.4% and was headed for its highest close in almost a year.

Previewing The Payrolls Report: Watch Out For Short-End Fireworks

As the world awaits the next in the series of "most important jobs numbers ever," which has now been shown as only relevant to the degree by which it moves the S&P 500 higher (or god forbid lower), consensus expectations are for a goldilocks 180k gain in jobs and flat 4.9% unemployment rate. The market will be looking to see if the Fed's recent optimism surrounding labor market conditions (despite a collapse in their own LMCI) are justified and if the employment figures of July and August demonstrate a new trend in conjunction with June ahead of the September meeting... and of course the 'election adjustment'.

Services Data Disappoints: Suggests "No Signs Of US Economy Moving Up A Gear" In Q3

Following Monday's confusing manufacturing data (PMI up, ISM down), today's Services economy data suggests growth is just as confused and muted as PMI flatlined from June with activity at its weakest in 5 months and new business slowing down. ISM Services missed expectations (dropping modestly to 55.5 from 56.5) with employment dropping from 52.7 to 51.4 (despite a bump in new orders). But, as Markit concludes, "those looking for signs of the US economy moving up a gear in the third quarter will be disappointed by the PMI readings for July."

World Stocks Drop For Third Day On Growing Concerns About Central Bank Policy, Tumbling Oil

After 7 consecutive drops in the Dow Jones, the Industrial average is set for an 8th decline with US equity futures modestly lower in the premarket as risk-averse sentiment persists overnight. Oil’s continued slide and recent plunge into a bear market, despite some stabilization this morning just south of $40, has finally rekindled global growth concerns, and is keeping a lid on bullishness. European stocks are little changed, while Asian stocks and S&P futures fall.

US Manufacturing PMI Bounces To 9-Month Highs, ISM Drops

Following China's great-and-terrible manufacturing PMI data overnight, Markit's US manufacturing index surge to 9-month highs, printing at the expected 52.9 led by faster growth of output, new orders, and employment. However, in true Chinese-style, US ISM Manufacturing missed expectations (52.6 vs 53.0) with new orders and employment dropping. So take your pick!