Daily Economic Update: September 6, 2024

 Jobs Day in 'merica. If you didn't make it into work today because you were out late watching football or because you're getting an early start on the weekend, or traveled to Brazil for Packers v. Eagles, it's a Jobs Friday nonetheless. 

While we all obsess over the data this week, you likely missed the true highlight of the week, which was Matt Levine's Money Stuff titled: "Hedge Funds Help Companies Hedge" which might have created history by being the first somewhat mainstream piece about the topic of Deal Contingent hedging.  I mean sure Risk.net and some other publications may have covered this subject from time to time, but this was something.

Yesterday's data was mixed.  You had the notoriously volatile ADP employment data which was weak, showing the lowest number of jobs added since 2021.  Then you had jobless claims coming in better than expected, some mixed data on productivity and wages and finally ISM services coming in better than expected with strong new orders and some rising prices.  I think services is what we mostly do in 'merica, so that's good.   Put it all together and I guess we're in a phase where companies aren't really hiring, but they also really aren't firing either.  As Joe Weisenthal of BBG put it the other morning:

"But right now, we're in a "low hiring, low firing mode" as Richmond Fed President Tom Barkin put it in a recent interview. He added that this is unlikely to persist very long. One of the two is likely to pick up. And with the number of job openings falling as much as it as, that obviously increases the concern that the low hiring component is not likely to reverse soon."

I guess we'll see what the Jobs numbers show today and what Waller and Williams have to say later, from there markets might adjust the betting line on 25bps or 50bps at the upcoming FOMC Meeting.

XTOD: As we head toward another key jobs figure, it’s clear the Fed has ignored vital labor market data for months. In my latest piece, What This Job Market Really Means, I explore the intersection of jobs and economic trends as "Something is rotten in the state of Main Street."  https://prinsights.substack.com/p/what-this-job-market-really-means

XTOD: You gotta laugh - or cry - at the fact that hundreds of finance professionals (am not talking about clueless Twitter grifters trying to make a living by conning retail investors, but actual strategists, economists,…sell and buy-side) who for months on no end could not figure that layoffs are the last piece of the puzzle. That’s why bear markets exist. They cleanse the system from incompetence.

XTOD: The Internet can be a tool of social control just as easily as it can be a tool of misinformation. That's why I still listen to Madison and Jefferson, because what they warned about - states seeking tyrannical power - is still a threat, maybe even moreso now.

XTOD: The federal government is an insurance company with an army. You can’t make major spending cuts without slashing Social Security, Medicare and Medicaid and/or weakening national defense

XTOD: For many of the most successful investors I've interviewed, the freedom to construct a life that aligns authentically with their passions and peculiarities may be the single greatest luxury that money can buy." —from the Epilogue of "Richer, Wiser, Happier"

https://x.com/nomiprins/status/1831687843716198444

https://x.com/INArteCarloDoss/status/1831660085287772370

https://x.com/mtaibbi/status/1831771259480228238

https://x.com/paulkrugman/status/1831767525019021364

https://x.com/WilliamGreen72/status/1831093471572320452