Stocks and Bonds Reeling After Strong ISM and ADP Jobs Reports – MishTalk

ADP reports Private Sector Employment Increased by 497,000 Jobs in June. ISM Services are strong. More Fed rate hikes are in the picture.

Please consider the ADP National Employment Report for June.

Highlights of Manufacturing Products

• Natural resources/mining 69,000
• Construction 97,000
• Production -42,000

Basics of Service Delivery

• Trade/transportation/utilities 90,000
• Information -30,000
• Financial activities -16,000
• Professional/business services -5,000
• Education/health services 74,000
• Entertainment/hospitality 232,000
• Other services 28,000

Key Comments

• Job creation rose in June, led by consumer-facing services. Entertainment and hospitality, trade and transportation, and education and health services showed strong gains. However, the market is fragmented, with manufacturing, information, and finance showing decline.
• “Consumer-facing service industries had a strong June, aligning with the push for higher-than-expected job creation,” said Nela Richardson, chief economist, ADP. “But wage growth continues to slow in both industries, and hiring is likely to pick up after a late-cycle uptick.”

ISM Services Grows Strongly, Prices Increase for 73 Straight Months

Earlier today I noted ISM Services Rebounds Sharply, Prices Rise 73 Straight Months

Differences

The ISM is another variation on this strange of strange economies. ISM performance heralds a recession that is not here unless Gross Domestic Income (GDI) is correct.

We haven’t seen an economy like this for something like forever.

ADP Report Increases Divergences

Manufacturing, Information, Financial Activities, and Professional and Business Services all struggled according to this report.

However, the overall picture is sure to increase the discussion of further rate hikes by the Fed.

Bond yields are across the board with 10-year yields, 5-year yields, and 30-year yields at 11, 14, and 10 basis points respectively.

The major US stock market indexes, DOW, Nasdaq, and S&P 500, were down about one percent each.