Morning Report: Payrolls disappoint

Vital Statistics:


Last Change
S&P futures 2819 14.35
Oil (WTI) 53.02 -0.46
10 year government bond yield 2.12%
30 year fixed rate mortgage 4.13%


Stocks are higher this morning after yesterday’s rally continued overnight. Bonds and MBS are flat.


Fed Chairman Jerome Powell said yesterday that the central bank was monitoring the trade tensions between China and the US and would “act appropriately” to maintain the economic expansion. Investors took this to mean that the Fed would probably cut rates this year. The stock market had its best day in 5 months, and bonds sold off a touch, although lower rates should be supported by low overseas yields and the prospect of a rate cut.


Donald Trump announced that he would institute tariffs on Mexican goods if the country didn’t do more to curb illegal immigration into the US. This new front in the trade war was the catalyst to push the 10 year below 2.1%. Yesterday, Republican senators warned that there was not support for tariffs in the Senate.


Mortgage Applications increased 1.5% last week as purchases fell 2% and refis increased 6%. “Mortgage rates dropped to their lowest level since the first week of 2018, driven by increasing concerns regarding the ongoing trade tensions with China and Mexico,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Some borrowers, particularly those with larger loans, jumped on the opportunity to refinance, bringing the index and average refinance loan size to their highest levels since early April. Additionally, refinances for FHA and VA loans jumped by 11 percent.”


Payrolls only increased by 27k last month according to the ADP Employment Report. Small firms reduced payrolls by 52,000 last month, and it looks like the majority of that was in construction. Manufacturing fell by 3,000 which might be tariff related. The service sector increased employment by 71,000 and large employers increased by 68,000. Street expectations are for a 185,000 increase in payrolls for Friday’s jobs report. Now that the Fed is out of the way, the wage growth number is no longer the focus.

26 Responses

  1. Even Vox admits it:

    “The border is in crisis. Here’s how it got this bad.

    There really is something unprecedented — and deadly — happening at the US/Mexico border right now.

    But the threat is to migrants themselves.
    By Dara
    Updated Jun 5, 2019, 1:47pm EDT ”


    • we could always, you know, reduce our military involvement in the world too…


      • Also, the neocons pushing all-war-all-the-time are generally civilians. So not sure that solves anything. And also it’s never going to happen. The folks engaged in protecting democracy from dying in darkness shouldn’t waste so much ink on fantasy and magical thinking.


  2. This thread can be summed up with, YELL LOUDER!”


    • Or “the DNC knows that droning on about a climate crisis that doesn’t seem to impact voters—even after 30 years of claiming the end is near—isn’t a vote-getter. And we don’t know that because feelz.


    • The idea that some things are simply none of her business never crosses her mind….


    • She’s deluded. She wasn’t an unreconstructed bigot when she identified as Republican that suddenly got fixed when she became a Democrat. That’s her new fictional memories that work with her current worldview. Her discussion with the family member wasn’t about how much the other person didn’t care—that’s just how she interprets it so only anything that confirms that worldview managed its way through the diarist’s filters. In short it’s all narrative/worldview confirming bullshit that offers nobody anything useful or actionable. It’s just the recitation of a personal religious doxology.

      “Oh, I’m not good like you because I don’t care about other people” is not something people say to others.

      Just as “I used to hate gay people and black people when I was a Republican” is not a real thing.


  3. Recent email from the Bernie Campaign:

    Over the weekend, news broke: the Koch brothers are ready to start spending their obscene wealth supporting certain Democratic candidates running in contested primaries.

    Now, you would think that having already bought up the entire Republican Party, that they might be satisfied. But apparently that is not the case. They will not be satisfied until they have bought BOTH major parties.

    That is not democracy. That is oligarchy. And we cannot let it happen:

    Make a $3 contribution to our campaign as a way of saying there is NO WAY we are going to let the Koch brothers start buying up Democratic candidates and the 2020 campaign.

    Obviously, they aren’t planning on supporting Bernie. Also, no sense of irony on using this (as every other thing that happens) as a fund raising tool.

    The Bernie campaign is sure good about raising money.


    • KW:

      Make a $3 contribution to our campaign as a way of saying there is NO WAY we are going to let the Koch brothers start buying up Democratic candidates and the 2020 campaign.

      Is this an admission by Bernie that he is “bought” by anyone who donates to his campaign?


      • It’s evidence, IMO, that Bernie’s campaign is first and foremost a fundraising mechanism, and would be very curious as to how that money is ultimately deployed and what happens to what is left when the campaign is over. Turns out raking in the filthy lucre at $3 a pop is a moral imperative for his campaign, while companies getting rich selling $3 widgets or $3 burgers are evil and must be taxed to pay for healthcare. Does he want political campaigns like his own taxed to pay for social programs? No. Is he doing anything more than selling outrage and virtue signaling at $3 a pop? No. My primary problem with the left specifically (while I object to all political tribalism) is how deep and wide the “for me but not for thee” hypocrisy runs amongst progressives. They want freedom for themselves—but not for anyone else. Money is fine in their hands but not the hands of corporations or successful businessmen.

        Bah! I’m voting for Bill the Cat.


      • Also Bernie avoids acknowledging just how much his interests and those of the Koch brothers align. But, you know, if we send him $3 today he just might.


  4. Trump should have been more adroit here:

    Rather than make the comparison to a hypothetical Congressman, he should have turned it back against the press and asked if the NYT should have called the FBI when it received his partial tax returns, which were leaked illegally.


  5. Ugh:

    “but it’s important to us that YouTube is a safe place for all.”


    • supposedly jordan peterson is launching a censorship-free platform… thinkspot or something.


    • “While there’s an argument to be had about clamping down on the purveyors of hate speech…”

      I am surprised to see Taibbi use the term “hate speech” seriously. I’m no fan of his, but he doesn’t strike me as the kind of lazy journalist that leans on that kind of vague, SJW generality. I’d more expect him to mock the notion than to embrace it.


  6. Having rediscovered socialism, Vox millennials rediscover the case for Prohibition:



    because drug prices go up when you make them OTC. derp


    • these people won’t be satisfied until the government provides free birth control to everyone.


    • Sigh, the level of ignorance here:

      “he bill won’t make birth control over-the-counter — only the Food and Drug Administration can do that.”

      Guess where the FDA gets it’s authority from? If Congress wants to overrule the FDA via statute, they certainly have the power to do so.


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