Market Recon Friday

Good Morning,
                       The incident in Dallas leads the news this morning.  This comes on the heels of incidents in Louisiana, and Minnesota, while Chicago, for 2016 maintains the most violent pace in that city’s already violent history.  There’s much more if you look around.  I was going to opine this morning on the looming Jobs number, and how that would impact bond yields today, as well as all of the Fed speak that we’ll be up against next week, but I think the talk of economics has to take a back seat right now.
                       My people, my American people…. this has got to stop.  Right now.  We, all of us, must immediately start working on repairing the fabric of community.  This is not about us or them.  Everyone of us has animosities toward someone.  The time to forgive is at hand.  We must.  The time to love each other is now.  Love each other.  Do it.  It is our children that will live in a more reckless, less socially responsible world, unless every stinkin’ one of us sets an example.  Be that guy.
                      We can heal.  Is it too late?  It’s never too late.  Say a prayer (I’ll always tell you to do that), drink some water, get your gear on, and let’s go.  You have a mission today.  In fact you have one every day until they put you in the dirt.  Make that first move.  Try to connect with someone ….. someone you have no reason to connect with.  Somebody clearly different from yourself.  Everybody matters; make sure they know that they matter to you.  Try to be a shining beacon of purity.  Try.  What else are you here for?  Maybe, just maybe twenty-five, or a hundred people, or almost everybody will think you’re crazy, but at least one will try it too.  One is worth it.
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Jobs Day (June) 08:30 ET
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Non-Farm Payrolls:  We all know that May came in at an absolutely awful 38K. after April hit the tape at a formerly awful 123K.  Before that, five of six months had printed at 200K+.  Today, expectations are that this data-point gets close to being back on track with something close to 176K.  The range for this one is rather wide, and actually skews slightly to the upside.  The hope for today is that we also see a serious upside revision to both April & May, especially May.  To me that number seems like it had to be some kind of mistake.  At least we know that we’ll get those 35k Verizon employees back.  This number is the headline event, as far as traders are concerned.  Other numbers within this report matter, but this is the one that can impact expectations of changes in directional monetary policy….. that, and consumer level inflation.
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Unemployment Rate:  This item will not have an impact on your day.  The newspapers love it, but the market no longer recognizes it’s value.  4.7% or 4.8% doesn’t really matter when you know that what people consider the real unemployment rate is at least twice that.
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Participation Rate:  This one stands at 62.6%, which is close enough to 40 year lows to still be considered awful.  Any pop in the rate here, though actually a positive for the economy, will cause headline unemployment to go higher.  That may be taken negatively by the press.
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Average Hourly Earnings:  This has been inconsistent throughout the recovery. It also happens to be the second most important subcomponent within the report, as far as Janet Yellen is concerned.  February, and April both brought with them nice month over month gains in this space, but largely every positive move has been followed by a stumble.  For June, consensus is for a m/m increase of 0.2%, which is exactly what we say for May.
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Average Workweek:  This one is considered an alternate way of looking at age growth, and it really has not given us much.  Economists are projecting another month of folks averaging 34.4 hours per week.
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Underemployment Rate:  This is the one that gets people going.  Considered by most to the “Real Unemployment Rate”, because it includes part time workers, and those marginally attached.  We all know several people who used to have high paying jobs that now work retail or drive school buses a few hours a week.  Where as Gallup’s Unemployment Rate is now close enough to the BLS headline rate that I don’t mention it, there is still real disparity between the two here.  In May, the BLS printed Underemployment at 9.7%.  Yesterday, for June, Gallup’s version of this item hit the tape at 13.6%, down from May’s 13.7%.
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Unrelated Macro
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13:00 ET
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Baker Hughes Rig Count (Weekly): Crude was just pounded yesterday when the EIA print badly missed API led expectations.  The number of US rigs involved in the production of oil increased last week from 330 to 341.  A similar move in the number today will likely have WTI testing $44.
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15:00 ET
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Consumer Credit (May):  Last month, the April print in this space hurt a bit.  Not only did the tally came in at $13.4B, but the part that gets economists all revved up (revolving debt) only nudged up $1.6B.  That means that folks barely used their credit cards at all.  You see, economist don’t get fired up about non-revolving debt…. auto & student related stuff.  They seem to think that the economy will pick up if you guys are willing to hurt yourselves.  That said, we look for $16.5b at the headline for May, with a nice increase in credit card usage if only because that last number was so low.