- Major US indices close lower on tariffs, jobs, nuclear subs and a firing
- Why are jobs revised and is there a better way? I think so. It starts with the data.
- Fed Gov. Adriana Kugler announces her resignation from the Fed Board effective August 8
- Trump: Jobs data is manipulated lower. The economy is booming but rates should be lower.
- Baker Hughes oil rig count -5 at 410
- Uncertainty Looms: U.S. Jobs Report shifts risk to economy toward unemployment
- Trump:Positions two nuclear submarines in "appropriate regions" due to inflamatory remarks
- European indices close sharply lower and down for the week
- Atlanta Fed GDPNow Q3 growth estimate falls to 2.1% from 2.3%
- US government turmoil stalls thousands of export approvals
- Fed's Bostic on CNBC: The revisions showed that the labor market is slowing down
- US construction spending for June MoM -0.4% versus 0% expected
- US ISM manufacturing index for July 48.0 versus 49.5 estimate
- University of Michigan final sentiment for July 61.7 vs 62.0 preliminary
- S&P Global Manufacturing July PMI final 49.8 versus 49.5 preliminary
- White House: Switzerland refused to make any meaningful concessions on trade barriers
- Fed's Hammack (2026 voter): NFP report was disappointing but healthy labor market.
- Swiss Pres. Keller: Government disappointed by US tariffs imposed on country
- Trump: Too little, Too late. Jerome
- US nonfarm payroll rises by 73K vs 110 K estimate/Unemployment rate 4.2%. Big revisions.
- Reuters source likely to approve another production hike on Sunday
- USTR Greer: Will be finishing paperwork on deals over the next week's/months
- Fed's Waller and Bowman comment on their dissent to this week's policy decision
- investingLive European markets wrap: Stocks stumble, dollar steady ahead of US jobs report
- Trump keeps up with the Powell bashing again today
The July nonfarm payrolls report showed just 73K jobs added, sharply missing the 110K estimate, with major downward revisions to prior months:.
- May was revised down from 144,000 to 19,000---> -125,000
- June was revised down from 147,000 to 14,000 ---> -133,000
The unemployment rate ticked up to 4.2% from 4.1% last month.
The sharp revisions led to the dismissal of the BLS Commisioner ('You're fired!") with Trump saying:
The reality is the 818,000-job downward revision was announced by the Bureau of Labor Statistics on August 21, 2024 - not on November 15 right after the election. It reflected a preliminary benchmark adjustment showing that payrolls between March 2023 and March 2024 were overstated by that amount.
August 21...November 15... You can do and say anything when you are the President these days.
Earlier the pink slip was also given on TruthSocial (or announced to the world).
The "major mistake" wasn't really a mistake but a revision of the data, which happens because of the nuances of the data collection mainly. I spoke to the issues and potential solutions in this post here.
In addition to the US jobs report, the other data was not particularly good. Construction spending was -0.4% versus 0.0% estimate. ISM Manufacturing was lower at 48.0 versus 49.5. Finally, the University of Michigan sentiment dipped to 61.7 from 61.8 preliminary with the 1-year inflation ticking up to 4.5% from 4.4% preliminary but the five year inflation expectations falling to 3.4% from 3.6%.
As if that wasn't enough, Pres. Trump announced that he was positioning US nuclear submarines in the "appropriate regions", just in case the foolish inflammatory statements from Russia's Medvedev are more than just that. I guess it is like sending in the National Guard into LA, but on a bigger scale.
All of that - and the start of the August 1 tariffs with the Canada rate set at 35% and Switzerland set at 39% - led to stocks moving lower. The NASDAQ index fell -2.24%. The Russell 2000 also fell more than -2% with a decline of -2.03%. Major indices also closed lower for the week
US yields did move sharply lower (price's higher) as result of the weak data with the two-year down -23.7 basis points. The market is pricing in a September cut, with another one scheduled before year's end. The 5-year yield fell by 20.5 basis points, and the 10 year fell -14.4 basis points to 4.215% – its lowest rate since April 28.
The US dollar did move sharply to the downside with the USDJPY down -2.26% (that was helped by flight to safety into the JPY). The dollar fell by -1.5% vs the EUR and by -1.00% vs the CHF. Versus the other major currencies:
- CAD -0.49%
- AUD -0.65%
- NZD -0.49%
- GBP -0.55%
Atlanta Fed's GDPNow tracker was revised lower to 2.1% growth for Q3, adding to signs of a slowing economy.
Feds Waller and Bowman explained their decision for the dissent to lower rates (the Fed should move to neutral and not be restrictive) at the FOMC rate decision on Wednesday, and were vindicated by the data today.
Fed's Bostic kept a stiff upper lip in regard to his projections for one cut in 2025, but acknowledged that the risks were skewed back toward equality for inflation and employment, and that he would have to reevaluate is view given the new data.
Fed's Kugler announced that she will be stepping down from her position as governor on August 8 which explains her absence "for personal reasons" from the vote on Wednesday. That also gives Pres. Trump the opportunity to appoint a new - more dovish - Fed Governor (Hassett perhaps?).
Meanwhile, European and Swiss officials expressed disappointment over U.S. tariff actions, and the White House confirmed Switzerland refused to make progress on trade barriers.
Eyes this weekend will turn to Sunday’s expected OPEC+ production guidance. Rumors had it that they would increase production by 549,000 BPD. Oil prices moved lower by over $2.00 to $67.25.
Thank you for your support this week. Have a good weekend.
This article was written by Greg Michalowski at investinglive.com.from Investinglive RSS Breaking News Feed https://ift.tt/uXejLoJ
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