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CNBC
2 hours ago
- Business
- CNBC
CNBC Daily Open: The observed slowdown of the U.S. economy depends on your vantage point
Based on payrolls processing firm ADP's jobs report and the U.S. Federal Reserve "Beige Book," the United States economy appears to be slowing. The number of private sector jobs created in May rose by a mere 37,000, almost three times lower than the Dow Jones forecast. And the Fed report noted that "economic activity has declined slightly since the previous report" released April 23. The ADP report, however, isn't always aligned with the Labor Department's jobs report, which will be released Friday. For example, the former stated that private companies added 107,000 jobs in January 2024, but the latter posted a 353,000 gain in nonfarm payrolls for the same period. Meanwhile, the Fed's "Beige Book" report is based on "reports from Bank and Branch directors" and "interviews and online questionnaires." Hence, while it provides a useful snapshot of economic sentiment, it is a "qualitative" report, as the Fed acknowledges, that might not capture economic data. According to Albert Einstein's theory of relativity, the speed at which an object is traveling depends on the position of an observer. Wednesday's reports can give an insight into the economy, but they could also be skewed by the vantage point of the observers. Dow snaps consecutive gainsU.S. stocks were mixed Wednesday. The S&P 500 was flat and the Nasdaq Composite added 0.32%. However, the Dow Jones Industrial Average slipped 0.22%, ending a four-day winning streak. The pan-European Stoxx 600 index rose 0.47% as the EU trade chief said talks with the U.S. were 'advancing in the right direction.' Separately, Bulgaria on Wednesday was approved to join the euro zone. 'Extremely hard' to make a deal with China: TrumpU.S. President Donald Trump said Wednesday on Truth Social that it was "EXTREMELY HARD" to make a deal with his Chinese counterpart Xi Jinping. On Monday, a senior White House official told CNBC that Trump and Xi were likely to speak this week. Washington and Beijing have blamed each other for violating a trade agreement reached in Switzerland on May 12. Slackening labor market in the called on Federal Reserve Chair Jerome Powell to "LOWER THE RATE" after payrolls processing firm ADP reported the lowest level of private sector jobs creation in years. Payrolls increased just 37,000 for May, below the downwardly revised 60,000 in April and the Dow Jones forecast for 110,000. It was the lowest monthly job total from the ADP count since March 2023. Fed's 'Beige Book' reports slowing U.S. economyThe U.S. economy has contracted over the past six weeks as hiring has slowed and consumers and businesses worried about tariff-related price increases, according to a Federal Reserve report Wednesday. In its periodic "Beige Book" summary of conditions, the central bank noted that "economic activity has declined slightly since the previous report" released April 23. Circle prices its IPO higher than expectedCircle Internet Group, the issuer of USD Coin, one of the world's biggest stablecoins, priced its initial public offering at $31 per share late Wednesday stateside. That's above the expected range of $27 to $28 and gives the company a total market value of $6.8 billion. New York-based Circle, its founder and some original shareholders will raise $1.05 billion in the offering of 34 million shares. [PRO] Financial sector stocks slowingThe financial sector, seen as a potential winner of the Trump administration, is starting to cool. While the group is still outperforming the S&P year to date, the gap has been closing in recent weeks, wrote Wolfe Research analyst Rob Ginsberg, who highlighted one aspect of the sector that is the "most concerning." AI, trade and $24 socks: Inside the inaugural SXSW in London South by Southwest, or SXSW, is a festival held in Austin, Texas, every year that brings together big names in music, film, art and technology. The organizers brought the event to London for the first time this week. It may be a well-known event in the United States, but it certainly hasn't reached the same level of recognition in Britain. "What's that?" asked a pedestrian who was passing by a SXSW London sign. CNBC's Arjun Kharpal looked at what's going on inside.
Time of India
2 hours ago
- Business
- Time of India
Asian stocks cautious ahead of Japan bond auction
Asian shares opened cautiously after weak US economic data reinforced expectations for Federal Reserve interest rate cuts this year. A regional gauge swung between small gains and losses at the open as South Korean shares gained for a third day while Japanese indexes dropped. Treasuries steadied after rallying across the curve Wednesday as data showed a contraction in US service providers and a deceleration in hiring. The dollar declined for a second day. Markets are focused on the auction of super-long-term bonds in Japan Thursday. The sale comes after dismal showings recently, as demand for the far-end of the curve sputters across the globe. US economic activity has fallen slightly in recent weeks, indicating tariffs and elevated uncertainty are rippling across the economy, according to the Fed's Beige Book. Still, a gauge of global stocks closed at a record high Wednesday amid speculation that the worst may be over after the tumult fueled by President Donald Trump's reciprocal tariff announcement two months ago. Live Events 'The specter of a slowdown in growth continues to feed niggling fears that the equity market has gotten too far ahead of itself,' Kyle Rodda, a senior market analyst at wrote in a note Thursday. Swap traders are pricing in two Fed reductions by the end of the year. The weaker yields on Wednesday added downward pressure to the greenback and left an index of the dollar 0.4% lower, compounding a weakening trend. The Institute for Supply Management's index of services dropped a touch below the 50 level that separates expansion and contraction. Private payrolls rose the least in two years. Nonfarm payroll jobs data due Friday will provide further clarity. 'Markets are likely to view this through the lens of disappointment on the real growth side,' said Florian Ielpo at Lombard Odier Investment Managers. 'While this represents good news for the US economy in terms of potential rate relief, the improvement already priced into equities and credit spreads could be challenged by this series of weaker numbers.' Later in the day the European Central Bank will hand down an interest rate decision. Attention in Asia will be on the bond sale in Japan. Japanese government bonds are seen underpinned as US Treasury yields extend declines, with investors focused on demand at the 30-year auction later on Thursday. Kevin Zhao, head of global sovereign and currency at UBS Asset Management, floated the idea that Japan should stop issuing long bonds to halt a recent selloff. Japan's sovereign debt is back in the spotlight as the government prepares for another sale of super-long-term bonds after dismal showings at recent auctions. 'It's time for the MOF to recognize this structural shift in demand for long-dated government bonds,' Zhao said in an interview. 'The MOF should announce they will stop issuing any bonds over 30 years, because there's no demand anymore.' ETMarkets WhatsApp channel )
Economic Times
2 hours ago
- Business
- Economic Times
Asian stocks cautious ahead of Japan bond auction
'The MOF should announce they will stop issuing any bonds over 30 years, because there's no demand anymore.' Synopsis Asian shares displayed caution as weak US economic data bolstered expectations for Federal Reserve rate cuts. Treasury yields stabilized after a rally, while the dollar weakened. Markets are closely watching Japan's super-long-term bond auction amid concerns about demand. US economic activity has slowed, raising fears about equity market valuations. Asian shares opened cautiously after weak US economic data reinforced expectations for Federal Reserve interest rate cuts this year. ADVERTISEMENT A regional gauge swung between small gains and losses at the open as South Korean shares gained for a third day while Japanese indexes dropped. Treasuries steadied after rallying across the curve Wednesday as data showed a contraction in US service providers and a deceleration in hiring. The dollar declined for a second day. Markets are focused on the auction of super-long-term bonds in Japan Thursday. The sale comes after dismal showings recently, as demand for the far-end of the curve sputters across the globe. US economic activity has fallen slightly in recent weeks, indicating tariffs and elevated uncertainty are rippling across the economy, according to the Fed's Beige Book. Still, a gauge of global stocks closed at a record high Wednesday amid speculation that the worst may be over after the tumult fueled by President Donald Trump's reciprocal tariff announcement two months ago.'The specter of a slowdown in growth continues to feed niggling fears that the equity market has gotten too far ahead of itself,' Kyle Rodda, a senior market analyst at wrote in a note Thursday. ADVERTISEMENT Swap traders are pricing in two Fed reductions by the end of the year. The weaker yields on Wednesday added downward pressure to the greenback and left an index of the dollar 0.4% lower, compounding a weakening Institute for Supply Management's index of services dropped a touch below the 50 level that separates expansion and contraction. Private payrolls rose the least in two years. Nonfarm payroll jobs data due Friday will provide further clarity. ADVERTISEMENT 'Markets are likely to view this through the lens of disappointment on the real growth side,' said Florian Ielpo at Lombard Odier Investment Managers. 'While this represents good news for the US economy in terms of potential rate relief, the improvement already priced into equities and credit spreads could be challenged by this series of weaker numbers.'Later in the day the European Central Bank will hand down an interest rate decision. ADVERTISEMENT Attention in Asia will be on the bond sale in Japan. Japanese government bonds are seen underpinned as US Treasury yields extend declines, with investors focused on demand at the 30-year auction later on Zhao, head of global sovereign and currency at UBS Asset Management, floated the idea that Japan should stop issuing long bonds to halt a recent selloff. Japan's sovereign debt is back in the spotlight as the government prepares for another sale of super-long-term bonds after dismal showings at recent auctions.'It's time for the MOF to recognize this structural shift in demand for long-dated government bonds,' Zhao said in an interview. 'The MOF should announce they will stop issuing any bonds over 30 years, because there's no demand anymore.' 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Bloomberg
3 hours ago
- Business
- Bloomberg
Bloomberg Daybreak Asia: Futures Mixed on Fed Rate Cut Hopes
Treasuries rallied as tepid US economic data reinforced expectations for Federal Reserve interest rate cuts this year. The 10-year Treasury yield fell 10 basis points to the lowest level in almost a month. Equity-index futures for Asia were mixed while an index of US-listed Chinese shares rose 2%. We get a read on markets from Willem Sels, Global Chief Investment Officer at HSBC Global Private Banking and Premier Wealth. Plus - economic activity declined slightly in the US in recent weeks, indicating tariffs and elevated uncertainty are rippling across the economy, the Federal Reserve said in its Beige Book survey of regional business contacts. Mentions of tariffs came up 122 times in the Beige Book, compared with 107 in the prior report. Variations of the word "uncertain" appeared 80 times. We look at what it may mean for monetary policy with David Bahnsen, Founder and Chief Investment Officer at the Bahnsen Group.
RTHK
3 hours ago
- Business
- RTHK
US stocks mixed on slower hiring, economic uncertainty
US stocks mixed on slower hiring, economic uncertainty Shares on Wall Street finished mixed on Wednesday amid ongoing economic uncertainty. Photo: AFP Wall Street stocks closed mixed on Wednesday on signs that US economic activity was cooling, even though investors were careful not to overreact to a slowdown in private sector hiring. The Dow Jones slipped 0.2 percent to 42,427, while the S&P 500 was flat at 5,970. The Nasdaq added 0.3 percent to 19,460. Data from payroll firm ADP showed private sector employment growing by 37,000 jobs in May, sharply below expectations of 115,000 according to a consensus forecast. But markets shrugged off the figures for now. "Lower interest rates and the thought of the [Federal Reserve] responding sooner rather than later to signs of a weakening economy have acted as underpinning factors," said analysts from in a note. On Wednesday, the Fed also noted that "economic activity has declined slightly" in its latest "Beige Book" survey of economic conditions. It flagged household and business caution due to heightened uncertainty surrounding US President Donald Trump's policies and slower hiring as well. (AFP)
