The November ADP number of a 32,000 decrease was much weaker than expected, reportedly sparking yesterday's rally in US stock indexes.
Thursday will see the release of weekly initial jobless claims, expected to come in at 220,000.
Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis.We will also get the next round of weekly export sales and shipments, with all eyes on soybeans and the big name in the game. And no, I don't mean Bangladesh.
For many years now, the US labor market has been the cornerstone of what was perceived to be a stubbornly bullish “economy”[i]. Strong consumer demand, based on the idea jobs were plentiful and people were working, was thought to be key to the economy’s ability to withstand the inflation created by trade wars and tariffs. We watched this play out in a number of sectors, most notably beef, as tight supplies resulting from a smaller US herd was met with continued strong demand. This angered the US president to the point of demanding the US increase its beef supply, threatening the use of the Department of Justice to get his way. The packing industry responded by shutting down packing plants and reducing production at others. Along the way, other sectors have also started to struggle, as indicated by Wednesday’s ADP private employment report for November. The number was expected to be an increase of 40,000 but came in at a decrease of 32,000. This was credited as one of the catalysts for the rally in US stock indexes ($INX) ($DOWI) ($NASX) on the idea it strengthened the case for another rate cut by the US Federal Open Market Committee next week. Later Thursday morning we will get the next weekly Initial jobless claims update, for the week ending November 29, with the expected number at 220,000 as compared to the previous week’s 216,000. Think about it this way: As long as the US president sticks with his reality tv catchphrase, “You’re fired”, his want of lower interest rates and higher stock prices will be fulfilled. In other news, we will also get the next round of catch-up weekly export sales and shipments numbers this morning, this set for the week ending Thursday, October 30. So far, the big name in the soybean (($CNSI) game remains missing.
[i] Keep in mind I agree with the television show South Park when it comes to the term Economy: “The Economy is not a supernatural, all-knowing entity. The Economy is just an idea made up by people thousands of years ago. The Economy is not real and yet it is real…It’s just something made up by people. Truly meaningless until we put our faith in it. Faith is what makes and Economy exist. Without faith, it is only plastic cards and paper money.”
To this I will add the Economy is based more on one’s political view rather than any economic standards. How one thinks about the economy depends on which side of the political aisle one sits on and one sits in the Big Chair in the Oval Office of the US White House.
On the date of publication, Darin Newsom did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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