Jun 2, 20234 min read

U.S ISM much lower / VIX on lows / Lagarde cautious on rates / NFP strong-confusing / OPEC+ next

Saxo/NFP : One of those impossible US jobs reports. Ridiculous blowout on establishment survey (NFPs) beating over +200k incl. revisions, but household survey spikes UR to 3.7% from 3.4% with no participation rate pickup. Earnings weaker than exp despite yet another drop in weekly hours....
US Q1 unit labor costs 4.2% vs 6.0% expected, ISM Prices Paid 44.2 (exp 52.3), ISM Manuf supplier deliveries collapse, index fell to 43.5 in May, lowest since March 2009, ADP stronger though at 278K, Initial jobless claims steady at 232k >>> bumper employment data and low inflation, however a note of cautious : May ⁦Challenger job cut announcements rose 287% y/y vs. 176% in prior month; tech sector led the pack with 22,887 cuts in May & total of 137k YTD, the most for the sector since 2009
Job Cuts From AI Are Just Beginning, the Latest Challenger Report Suggests
"The magnitude and duration of defaults in the next downturn is likely to surprise investors, based on our client conversations....We believe US HY, US Loan, and European spec-grade default rates will peak at 9%, 11.3%, and 5.8% in Q4’24:" DB's Default Study 2023
"More than 100% of SPX market cap gains this year have been driven by just 7 stocks with 3 stocks accounting for nearly 70%....S&P 500 is up 9.1% led by Tech (+30%) while Russell 2000 is down 0.8% and the equal weight S&P 500 is 1.1% lower:" Citi's Stuart Kaiser (...concentration of risk).
Lagarde : The ECB is likely to move more cautiously from here - "we'll keep hiking, but...", "having hiked so far and so fast – considerable tightening is still in the pipeline
Monzo ramps up provisions for debts turning sour >>> the 'buy now and pay later' become 'buy now and pay never'
An entire movie was generated by AI. Every single pixel you see on link below is fake. An update on the number of AI related mentions on earnings calls and other transcripts of publicly traded companies: {Data from TA<Go>} - Thread below
About 1.6mln UK mortgages fixed at rates under 2% set to end between now & Q3 2024
BOFA CEO Moynihan says US consumer spending is slowing
Elon Musk is accused of insider trading by investors in Dogecoin lawsuit and The average price of a used Tesla is $22k lower than the peak last July. Now at a new all-time low due to huge price cuts & shift in supply to lower priced models

Markets :

Commodity prices over the last year - see below Thread >>> ''they may start to turn with weaker usd'', as rates pause/peak/skip etc..
STOCKS expect some kind of straight line earnings growth of about 20% through 2025 & BONDS are pricing the deepest rate cuts cycle of all time (pretty much) to begin sometimes over the next 6-9months >>> this seems rather hopeful!
Nikkei near all time highs, KOSPI in near bull market, China /HSI the other way, India near record highs though too, not all up or down, same as megacaps vs RTY etc
USDollar starts the month on weak side , gives away soonest the month-end fix is done, slightly weaker data overall, let's see what NFP does now
VIX lower, new recent lows, clearly helping eq markets overall/systematic etc