You’ve all seen the ADP employment numbers this morning–37,000 new jobs created in May versus a forecast of 110,000. As always it seems forecasts are pretty worthless.
The Institure of Supply Management (ISM) numbers came in soft across the board–with new orders coming in very soft while at the same time prices came in hot.
This afternoon we get the beige book report from last month and we will get a sense of what the various Fed folks are thinking about current conditions. I suspect that we won’t really learn too much new, but markets do seem to react to the report most of the time.
These numbers seem to continue the slow drift lower in economic activity–of course with the ‘official’ numbers on employment coming out on Friday things could change for the better–or they could confirm the slowing economy. Right now the 10 year treasury is taking the ADP numbers seriously with the yield off 7 basis points right now to be trading at 4.39%.
Maybe we are reaching the point where the softening economy will push bond yields down while the bond vigilantes will try to push rates higher. No one knows of course.
A heartening piece of news is that there seems to be a growing discontent with the ‘one big beautiful bill’–and senators are pushing back on the growth of the deficit with the bill. This is a key part to lower interest rates–we need pushback and serious work in Washington–we need to see the right signals.
So today I will sit and wait again–no reason to do anything, maybe for the rest of the week.
Bloomberg is reporting that USDA (Dept of Ag) is delaying and changing the current monthly report due to not aligning with the administration talking points. If they are not reporting actual facts that look bad, how are we too trust any numbers coming from the government? Including the Friday employment. I’m not into conspiracies, but certainly losing trust.
I saw that W Evans–I have never fully trusted the government numbers and this doesn’t help.
W Evans,
Not to criticize, but what makes you think this is something new? the last administration “massaged” numbers too (as have most/all administrations in my memory).
Sometimes things are done for political reasons blatantly, other times agencies just get out of step (Bureau of Labor Statistics comes to mind – their initial reports have generally been way off and had to be revised down significantly for several years.
To add to the old saw:
There are Lies, damn lies, and statistics – then there are government numbers.
The most push back I’ve seen from Congress was on the SALT tax with bipartisan support for raising the deduction, and on DOGE which was identifying billions in waste fraud and abuse. Now lots of crocodile tears from the usual suspects about deficit spending.
Comforting is the Executive/Legislative branch serves at the pleasure of Mr Bond market……. been adding QDI: WAFDP, SYF.A, BAC.q and bb’s PBI.b, KMPB (reset in’27) I have not participated in the CODI pref rebounds just too hot for me…. fwiw
Seems the obvious place to cut is military spending, lots of waste there. I work for a contractor on a military base and the waste is unbelievable. I am talking about waste that has nothing to do with defending this country, just money that didn’t need to be spent and people that didn’t need to be hired, people shipped back and forth at government expense for no reason. Duplication of services left and right, contractors doing jobs at $50 an hour that Airmen could easily be trained to do. Projects that get funded but are obsolete by the time they are completed. Don’t get me started…..
I came to realize DOGE was all theatrics and self-serving BS when they did not go full throttle after the Pentagon … where most of the waste, fraud, and abuse in the Federal budget exists.
Bill, in another life I was a federal employee. Long since retired. Here is an example of waste that comes directly from Congress, as does all spending. In the mid 1980’s National Weather Service was either going to be contracted out or reorganized. Politicians decided on the later. When the dust settled, I had less job responsibilities and got a grade promotion. Further, offices were over staffed during the several years of “spinning up.” There were too many people sitting around when not on operational shifts under the guise of training. Staffing was suppose to diminish, but of course that never happens.
I believe the war between Russia and Ukraine shows that a lot of our defense platforms could already be obsolete. Who needs a multimillion dollar tank when a drone costing what.. a few hundred dollars can take it out. The WW2 battleship vs aircraft scenario all over again. It’s time to rethink where our defense dollars go. We obviously need more high tech and less hardware. We can already pretty much eliminate the need for new piloted aircraft and just conduct aerial war with UAV’s controlled by someone sitting in a trailer at Clark AFB in Nevada. Maybe future military ground troops will be Tesla Optimus robots and warfare will be just a video game.
Richard, 100% agree. Billions to be saved. Will it get done? Probably not. Eisenhower told us long ago to fear the “military industrial complex”. The current defense spending, certainly not all, but still a significant sum, is an elaborate form of “pork barreling” by Congress. Watch the hue & cry from a Senator /Congressman whose district contains a military base, defense factory making tanks, etc when cuts are discussed. Rand Paul & Ron Johnson would be right there whining the loudest if their States were involved. Term limits on these Congressional goofs may be the answer.
The Department of Defense has FAILED (7) audits in a row and DOGE never lifted a finger to investigate this RED blaring flag..!!!
There was a study done 5-10 years back about the dual tracking Defense culture of the hied employees and the contracted civi’s each having a separate administrative and line jobs screaming duplication. This was a raised eye brow event as the public saw the rubber stamped corruption to a department with little to no oversight. The Audits reflect this and why are we not looking for waste and fraud here. EYES WIDE OPEN SHUT!
Anybody know what’s up (or should I say “down”?!) with ABLLL? Thanks…
Robert,
ABLLL down in sympathy with ABL common. NEWS: Morpheus Research says holds short positions in Abacus Global. Beware of the meat grinder!
I just saw that after posting my query. But thanks for the quick response!
And thanks for the cautionary reminder. I’ve had my greedy little fingers burned too many times by dabbling in dicey credits, and finally learned my lesson!
I took a few moments to send my senator, Mike Lee of Utah, a very tersely worded email regarding the BBB last week. I suggest others do the same. If we don’t start holding these clowns accountable who will?
You made me chuckle Dan.
My 1st read of this was that you were writing about the “Build Back Better” initiative from the previous administration. You would have been correct in my view.
But this is the “Big Beautiful Bill”. You are also correct about that, in my view.
You covered all of DC by using BBB.
The deficit must come down. Spending cuts? Tax increases? How about we try both. The deficit will kill us. Spending cuts/Tax increases will not.
Dan; Your comment is very interesting. Here’s my experience with Senators & House of Representatives members—–TOTALLY WORTHLESS. Numerous times I have called on atleast 5 or 6 of them depending upon the “subject matter” from their latest CC Bill legislation by Durbin/Marshall/Gooden to the DOGE findings to the GOP clowns who refused to codify Doge, etc. 1. You will never ever get them on the phone. 2. Most of the time you get a recording that says “THIS VOICE MAIL BOX IS FULL”. 3. To some 21 year old lackey that says this: “I will pass you’re information along”. Total Waste of Valuable Time my Friend. There are “Specific Groups” that give them the big money and thats who gets their attention. If you are a guy who donates to them $100, $200, or $300 they don’t give a rats ass about you. If they truly cared about doing the “Right Thing” for the American people then why is it 98% of the time they all vote right down the party line???? People should read the new book written by Ray Dalio. The “waste” by these people on both sides is absolutely OBSCENE.
Chuck,
I worked on capitol hill in various capacities many decades ago. most offices had people to talk to and they do keep track of sentiment and report it
to their member/senator. Not very direct, but it can help. Social media has made that more complicated, of course.
Once in a while a good idea comes in that way. I recall a piece of legislation from a constituent idea that was pretty good (and actually passed).