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Yahoo
04-06-2025
- Business
- Yahoo
Trio of Soft Economic Reports Boost Fed Rate Cut Odds, but What About Bitcoin?
This week's main economic event comes on Friday when the U.S. government releases employment data for May. Ahead of that though, were three fairly important data points of their own on Wednesday, and all flashed unexpected weakness. First to hit was ADP private payrolls for May and that report showed the addition of just 37,000 jobs last month, far shy of expectations for 115,000 and well south of April's already weak 60,000. It was the softest ADP number since March 2023. "ADP NUMBER OUT," said President Trump on his Truth Social. "'Too Late' Powell must now LOWER THE RATE." Next up was the May ISM Services report, which came in at 49.9 against 52 expected and 51.6 in April. A number below 50 shows contraction and May's report was the first time in that zone in one year. Finally, the U.S. Federal Reserve released its Beige Book for May, which showed even more softness in the economy. "Economic activity has declined slightly since the previous report," read the survey. "Half of the Districts reported slight to moderate declines in activity, three Districts reported no change, and three Districts reported slight growth ... the outlook remains slightly pessimistic and uncertain, unchanged relative to the previous report. However, a few District reports indicate the outlook has deteriorated." Added up, the fresh data sent the 10-year U.S. Treasury note tumbling ten basis points to 4.36%, its lowest level in a month. It also had the odds of a July rate cut rising to 29% from 22% one week ago and the odds of one or more rate cuts by September rising to 76% from 58%. Whither bitcoin? The shibboleth that bitcoin BTC needs an easy Fed to rally may no longer be so, if it ever was. The world's largest crypto soared nearly 50% from mid-April to a new record high two weeks ago even as a string of Fed officials continually said they saw no need to cut rates. Still, softer monetary policy from the U.S. central bank probably wouldn't hurt. For today at least, bitcoin is unimpressed with the thought of rate cuts coming sooner rather than later, continuing to trade in very quiet fashion around the 105,000 level. Friday's government jobs report is likely to be key. Another poorer than expected print might come closer to cementing a Fed rate cut or cuts as soon as this summer, and turn the interest rate picture from a headwind to a tailwind. Economist forecasts are for the U.S. to have added 130,000 jobs in May with the unemployment rate steady at 4.2%. "The ADP report does signal a genuine slowdown in labor demand, above all at SMEs (small and medium enterprises) which modestly shed jobs – important as SMEs account typically for around 2/3 of job growth," Marc Ostwald, chief economist and global strategist at ADM Investor Services International, told CoinDesk in an email. "It is wholly unsurprising given all the policy uncertainty and, above all, the ambiguity." "I suspect that the clampdown on immigration (legal and illegal) is shrinking what was a very abundant pool of skilled and unskilled labour, and competition is heating up," he continued. "At the margin, it creates additional inflationary pressure, on top of tariffs and measures to secure supply chains that will necessarily add to companies' operating costs." "How long it persists depends on how long the slowdown lasts, and the longer it goes on, the greater the risks of more significant layoffs, which, outside of highly specialized areas, would likely weigh quite heavily on wage growth, as job security would move to the forefront of employee considerations," Ostwald concluded. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-06-2025
- Business
- Yahoo
Markets Slide to Flat on Jobs, Trade, Beige Book, Earnings
Wednesday, June 4, 2025Market activity this Hump Day was a little of this, a little of that. Pre-markets were lower on a weaker-than-expected private-sector payrolls report from ADP ADP, but most major market indexes spent most of the session in the green. This took a downward turn this afternoon, perhaps somewhat on a cooler Beige Book, but likely more a lack of enthusiasm to propel markets higher amid continuing trade is, after all, the self-imposed deadline for major deals to be announced with U.S. trading partners. Perhaps they're all waiting until this evening to spring the news, but currently there aren't any new trade deals. The Dow closed -0.18% while the S&P 500 was +0.01%. The Nasdaq, still kept somewhat aloft by the continuing AI trade, was +0.32%, and the small-cap Russell 2000 slipped -0.08%. The fourth of eight Beige Books this year from the Federal Reserve was released this afternoon for the month of May. Overall, it demonstrated a slight decline from the April 23rd report, with half of the 12 cities (regions) posting slightly negative economic growth: Boston, New York, Philadelphia, Minneapolis, Kansas City and San three cities that saw slight increases in economic activity were Richmond, VA, Atlanta and Chicago. Those flat cities from the prior report included Cleveland, St Louis and Dallas. All 12 districts saw an increase in economic and policy uncertainty, and showed manufacturing slowing as a result. Consumer spending throughout the regions were mixed, generally along economic growth lines. Earlier today, we saw the final print for both S&P Services PMI and ISM Services, both for May. S&P PMI came in higher than the flash headline — +53.7 versus +52.3 — and up strongly from the previous month's +50.8%. ISM Services dipped just below the 50% threshold to +49.9%, off the +52.1% flash number and the +51.6% reported the S&P PMI saw a stable business environment domestically (tempered somewhat by two-straight down months on foreign demand), ISM showed orders and inventories shrinking while prices continuing to rise — now at their highest levels since November 2022. The last sub-50% print on ISM Services was back in June of last year; S&P hasn't been sub-50 since January of '23. Youth-oriented discount retailer Five Below FIVE outperformed Q1 estimates on both top and bottom lines after today's close, with earnings of 86 cents per share surpassing the 83 cents in the Zacks consensus on $970.5 million in revenues. This improved over the $967.6 million analysts had been expecting. Comps were good at +7.1%, and Q2 comps guidance is set between +5-7%.The company has raised the lower end of their earnings guidance for the full year, but is still a few cents beneath our consensus. Also, Five Below announced that its COO will be stepping down for personal reasons, to be replaced by the current CFO, who used to have that job previously. Shares initially dipped on the news but at now back up +1.7% in late-day trading. As we see most Thursdays, Jobless Claims will hit the tape ahead of the opening bell tomorrow. These jobs numbers, finely parsed as they are into weekly sets, follow Tuesday's unexpected rise in JOLTS job openings for April to 7.4 million and this morning's lower-than-expected private-sector payrolls from ADP ADP. (Friday morning brings us the big Employment Situation report from the U.S. government.)Also tomorrow, we expect to see an update on the April U.S. trade deficit, expected to improve greatly to -$63.3 billion from -$140.5 billion in the prior month. Also, Q1 Productivity is expected to remain steady at -0.8% ahead of Thursday's opening bell. There will also be mid-day speeches given by Fed Governor Kugler and Philly Fed President Harker or comments about this article and/or author? Click here>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report Five Below, Inc. (FIVE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-03-2025
- Business
- Yahoo
Trump's new tariffs, the Fed's Powell speaks, and jobs numbers: What to watch in the markets this week
President Donald Trump's 'liberation day' is on Wednesday. The president will unveil 'reciprocal tariffs' on many U.S. trading partners, and delayed 25% duties on Mexico and Canada are also scheduled to go into effect. The announcement won't end the uncertainty over the Trump administration's trade policies, as shown by the back and forth over earlier announcements, and may draw escalation in the former of retaliation and then further U.S. responses, observers have said. Chris Grisanti, chief market strategist at MAI Capital Management, said last week that he was surprised by the relatively benign market reaction to Trump's auto tariff announcement, which was more hawkish than he'd anticipated. He now expects new duties on April 2 to also be hawkish, possibly followed by another muted reaction from investors. Economic indicators are also in focus this week, with investors concerned about softening U.S. growth, particularly in the labor market. Here's what investors will be watching: The Chicago Business Barometer PMI for March is due at 9:45 a.m. EDT. The index may have fallen to 44.1 from a reading of 45.5 in February, according to the average economist estimate in FactSet (FDS). A reading under 50 indicates shrinking. The ISM manufacturing index, scheduled for release at 10 a.m., may show a contraction for March — 49.5 — down from 50.3 in February. The JOLTS job opening numbers for February will probably also show a decline, while construction spending may have picked up as weather improved. Be on the lookout for hoaxes — it's April Fools Day. Trump is scheduled to unveil 'reciprocal' tariffs on a wide range of U.S. trading partners; his office has yet to announce a time. Factory orders, scheduled for 10 a.m., may have risen 0.5% in February, slowing from 1.7% in January. The ADP survey at 8:15 a.m. may show that employers added 120,000 jobs in March, up from 77,000 in February. Federal Reserve Governor Adriana Kugler is scheduled to speak at 4:30 p.m. EDT on 'Inflation expectations and monetary policymaking.' Constellation Brands (STZ), which makes, imports and distributes alcoholic beverages, reports quarterly earnings today. The company's revenue and per-share profit may have been little changed from a year earlier. Economic data include jobless claims for the week through March 29 and the ISM Services index for March, and the U.S.'s February trade balance. Fed speakers include Vice Chair Philip Jefferson and Governor Lisa Cook. The U.S. employment report for March is due at 8:30 a.m. EDT, with seasonally adjusted gains in non-farm payrolls expected to slow and the jobless rate projected to rise to 4.2% from 4.1%. Wage growth probably held steady. Fed Chair Jerome Powell is scheduled to speak on the economic outlook at 11:25 EDT. Other central bank speakers include Michael Barr — who will address AI and banking — and Christopher Waller. For the latest news, Facebook, Twitter and Instagram.
Yahoo
05-03-2025
- Business
- Yahoo
Stagflation fears rise as a brutal jobs report follows new tariffs
The odds of the economy slowing while inflation stays fast — stagflation — may be increasing as a new survey showed that U.S. employers drastically curtailed their hiring last month to the slowest pace since July. Other recent data have pointed toward a weakening labor market, including unemployment claims and the ISM manufacturing survey — which also showed a big jump in prices paid. January CPI came in hot. And the Atlanta fed is now projecting a 2.8% contraction in the U.S. economy this quarter. While the Federal Reserve would normally cut interest rates to help buoy growth, that option may not be available if inflation remains high, creating a dilemma for policymakers. Additionally, the Fed can't use a rate hike to counteract the price shock from the sudden jump in tariffs. 'The Fed won't make the mistake' of racing in to save the day with a rate cut, Explosive Options' founder Bob Lang said last week. 'Inflation is still way too sticky. The bond market is telling you that there isn't room to cut. The specter of deflation is back.' Today's ADP Research (ADP) report showed that private-sector firms took on 77,000 workers in February, down from 186,000 in January and just above half the level that economists had estimated, according to a FactSet (FDS) survey. The tech, education and health services, and trade and transportation sectors lost jobs. This data is likely to be followed by a weak official jobs report on Friday, Chris Grisanti, chief market strategist at MAI Capital Management, told Quartz yesterday. While the consensus estimate calls for a bigger rise in payrolls last month than the 143,000 in January, Grisanti expects about 110,000, possibly even below 100,000. Investors often treat bad news as good news because it increases the odds that the Fed will cut rates, but this changes if they feel the economy is actually slowing, Grisanti said. Yesterday's trading pattern, where banks and industrials fell while tech bounced, reflected real concern about U.S. growth. 'Sometimes bad news is bad news,' Grisanti said. 'Tariffs could be hastening the inevitable decline you get at the top of markets as the economy is beginning to slow. [Donald] Trump just had the bad luck to be elected president at the top of the business cycle.' Not all the data is down-arrow: The ISM Services index for February came in higher than expected today at 53.5, comfortably in expansionary territory. Stocks rose, with Dow Jones Industrial average up 177 points, and the S&P 500 and Nasdaq Composite both showing modest gains. For the latest news, Facebook, Twitter and Instagram.
