10 Things You Need to Know: June 11, 2024
Key data releases this week include: NFIB Small Business Optimism (Tue), CPI (Wed), FOMC rate decision (Wed), PPI (Thu), and consumer sentiment (Fri).
Haver
June 4, 2024
Job openings declined 296,000 (-18.6% y/y) during April to 8.059 million after falling 458,000 in March, revised from -325,000 according to the Job Openings and Labor Turnover Survey. The number of job openings has been trending lower since early-2022. The latest reading is well below the recent peak of 12.182 million reached in March 2022.
Haver
June 5, 2024
The U.S. ISM Services PMI rose to 53.8 in May after falling sharply to 49.4 in April which was the lowest reading since December 2022, according to the Institute for Supply Management. The latest reading was the highest in nine months. An increase to 50.9 for May had been expected by the Action Economics Forecast Survey.
Haver
June 7, 2024
Nonfarm payrolls increased 272,000 (1.8% y/y) in May after rising by 165,000 in April and 310,000 in March. Expectations had been for a 195,000 rise in the Action Economics Forecast Survey. Average hourly earnings increased 0.4% in May (4.1% y/y) following an unrevised gain of 0.2% in April. The unemployment rate, measured in the household survey, rose to 4.0% in May from 3.9% in April.
Bloomberg
June 10, 2024
The European Central Bank must stay cautious, and last week’s cut in borrowing costs won’t necessarily be followed by further rapid moves, according to President Christine Lagarde. “We’ve made the appropriate decision, but it doesn’t mean interest rates are on a linear declining path,” she said. “There might be periods where we hold rates again.” Euro-zone borrowing costs aren’t on a predetermined trajectory, the president reiterated.
The Wall Street Journal, Reuters
June 4, 2024, June 5, 2024
China’s services sector experienced its fastest growth in 10 months this May, pushing employment levels up for the first time since January, according to the latest Caixin/S&P Global PMI data. The jump in service activity and staffing coincides with strong manufacturing performance, suggesting a robust economic rebound in China.
Capital Economics
June 6, 2024
Aggregate EM GDP growth remained strong in Q1, though we still expect a slowdown later this year. At a regional level, Emerging Asia will lead the pack, however there are tentative signs that recoveries in parts of Central and Eastern Europe and Latin America are unfolding quicker than previously expected. Still, diverging growth paths will continue to be a key theme borne out of the data in the coming quarters.
Barron’s
June 10, 2024
Bear Traps Report founder Larry McDonald says his data show that the S&P 500 Index’s largest three stocks have never accounted for a fifth of the S&P 500 before in its history. In fact, in the past 40 years, the top 10 components’ weight has tended to hover around the 20% mark.
Oxford Economics
June 9., 2024
The Fed is waiting for a string of data that strengthens its confidence that inflation is on a sustained path toward its 2% target. Jerome Powell will stick with the Fed’s mantra that monetary policy is flexible and will respond as appropriate. Therefore, it would be surprising if his presser altered our subjective odds of a cut in September.
Reuters
June 4, 2024
Central banks are planning to increase their exposure to the US dollar and shift away from the yuan due to low returns and rising political tensions, the Official Monetary and Financial Institutions forum said. A net 18% of reserve managers are planning to increase their US dollar exposure over the next 12 to 24 months, but demand for China’s currency has fallen.