Wolf Richter www.wolfstreet.com
The post-February euphoria in the US bond market has been a sight to behold, stirred up by NIRP and QE in Japan and the Eurozone. The ECB is beginning to buy corporate bonds, including euro-denominated corporate bonds issued by US companies. This is pushing larger amounts of corporate euro bonds into the negative-yield absurdity. And it has opened all kinds of credit doors in the US.
While we have already commented that the "awesomely bad" jobs report was just that, both qualitatively and quantitatively, one question is where the jobs weakness was most pronounced, i.e., which sectors saw the biggest drops in jobs in May. The answer: half of all job sectors posted a decline in May payrolls, a drop that was much broader than just the Verizon miss.
By EconMatters
Central Banks need to normalize rates ASAP, get financial markets back to a normal rate structure, and incentivize healthy lending practices in the actual economy as opposed to incentivizing poor capital allocation strategies like negative yield chasing nonsense.
https://www.youtube.com/watch?v=SDoGkvPlbAs
The brief April bounce in US Services economy has died as PMI slipped back to 51.3 as Markit warns "the service sector reported one of the weakest expansions since the recession." This weakness was followed by ISM Services which plunged to its lowest since Feb 2014, crushing the hopes of the April bounce. Employment plunged into contraction and New Orders tumbled, with the surveys pointing to GDP growing at an annualised rate of just 0.7-8% in the second quarter.
Bye bye April bounce!!
The incredible miss in May's jobs data (only adding 38,000 jobs, the lowest since September 2010) caused Rick Santelli to explode into another one of his epic rants - slamming the fact that the headline unemployment number will be touted and the central banks have created such a mess.
"Ten more months of thirty something thousand and we'll be under 3% unemployment! This totally summarizes the disconnect between good jobs, the jobs number, the unemployment rate and what motivates the fed and its dual pillars"