This chart from Arch Economics sums up what's wrong with anyone pointing to unemployment as a sign the labor market is "solid."
If not for collapsing labor force participation since April, unemployment would've climbed to 4.9% today instead of 4.25%. Source: Parker Ross @Econ_Parker, Arch Global Economics
Market expectations for Fed rate cuts have shifted sharply lower after weaker-than-expected US jobs data.
Investors are now pricing in 62bps of rate cuts for the rest of the year, up from ~35bps before the report. The probability of a rate cut at Sep17 meeting has jumped to 92%. Source: Holger Zschaepitz @Schuldensuehner
Berkshire Hathaway’s cash position is now 30% of their total assets, the most in history.
Source: Barchart
In the us, leverage is with the government, and less with companies and households.
Indeed, household debt outstanding as a share of US GDP is down over the past decade. Lowest since 2002. Source: BofA
It is all about tech...
US technology and tech-related stocks now account for ~55% of the US stock market, the highest share EVER. It has exceeded the 2000 Dot-Com Bubble levels by ~5 percentage points. By comparison, defensive stocks now reflect ~18% of the market. Source: Global Markets Investor
US recession odds have fallen to an all-time low of 11%.
Source: Kalshi
Trump’s tariff deadline is near.
Here’s a look at countries that have a deal — and those that don’t. source: CNBC
As expected, the fed leaves rates unchanged despite some of the positive developments observed on the inflations side (see below Inflation surprise index versus Fed Funds rate).
We note that this decision was met with opposition from Governors Michelle Bowman and Chris Waller, both of whom have advocated for the Fed to start easing. This is the first time since 1993 that multiple governors cast no votes on rate decision. Source: zerohedge
