Here's my summary of the key news overnight in 90 seconds at 9 am, including news of markets hitting record highs after the US jobs report.
This morning's release of the US non-farm payrolls report saw the ADP data confirmed. The jobs gain was +288,000 in June, and the unemployment rate eased lower to 6.1% from 6.3%. Their participation rate was unchanged however at a lowly 62.8%.
The most interesting part was that their long-term unemployed last month accounted for the smallest proportion of US jobless ranks in five years. And more than half the new jobs in 2014 came with above average pay.
The American trade deficit also added to the positive tone, shrinking a bit more than expected in May as exports jumped to a record high.
Across the Atlantic, the ECB left its policy rate unchanged this month, after cutting them to a record low last month and instituting a negative interest rate on deposits with the central bank. Mario Draghi says he thinks they now have the deflation threat contained but he also says the risks are all negative at the moment.
In Australia, the RBA spent yesterday trying to talk down its currency with some small effect. It was helped by weaker than expected retail sales data for May although building approvals were better than was anticipated. The RBA talk is unlikely to be effective for very long because markets indicate they don't see it backed up with action.
Declining American unemployment and a pledge that European interest rates will stay low jolted the Dow Jones Industrial Average above 17,000 for the first time ever, lifted the dollar and sent bonds lower.
UST 10yr bond yields jumped in New York today on the good jobs figures and are now at 2.65%. The oil price is down again and slipping below US$104/barrel. Gold fell too and is now at US$1,320/oz.
American markets have closed early today for their July 4 holiday weekend.
And finally today, an echo in China from a small item we covered here yesterday. The BNZ Online Retail report noted relatively heavier use by rural New Zealand of online shopping than their urban counterparts. Well, overnight China's media reported the same thing. Rural China is embracing online shopping faster than people in urban areas.
We start today with the NZ dollar higher again at 87.5 USc, and up to 93.6 AUc on a weak Aussie. The TWI is now at 81.5 and just 16 bps from being at a record high.
If you want to catch up with all the changes yesterday we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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17 Comments
.... the DOW's closed over 17000 points .... we're past the shortest day .... the Malaysians are happy to send their rat-bag diplomat back to our judicial system .... and America celebrates it's birthday today , same as Gummy ...
Life is good , friends , and getting gooder by the day !
The US job 'growth' is driven by part time work and labour force drop out. it's an illusion of 'growth' like that giant ponzi scheme Wall St
The Pitchforks Are Coming… For Us PlutocratsMemo: From Nick Hanauer
To: My Fellow Zillionaires
You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.
Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.
But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?
I see pitchforks.
.
South paw - I read this article the other day.
First side of the debate suggests that NIc Hanauer is correct. Lifting wages allows for increased spending which allows the big corporates to make more profits. It appeases the pitchfork holders the same as a Government handout.
Second side of the debate which is not mentioned in NIc Hanauer's article is that of the inflationary effects of the wage rises. So the pitchfork holders who were appeased at the start of the wage increase will only be appeased for a short time.
Then of course there is the fact that the 0.1 percenters will hold more wealth from the increased sales due to the increased wages. I find it difficult to see a point of equalibrium. Therefore I have to question the long-term sustainability of such practices.
Middle and low income earners tend to rely on a job - maybe the long-term solution is to move this group into being self-employed. Direct competition keeps everything honest and equilibrium appears to be easier to maintain.
My theory is that it is the taxation system which builds up inefficiencies and distortions in any economy. Unfortunately the 99 percenters can't see that this is the issue so as long as they wish to keep the existing system of large Government and taxation in place then we get more of the same and this allows large corporates, politicians and bureaucrats to benefit the most off this system. It is called trickle down for a reason.
Absolutely - however I'd be watching the length of the handle!
http://www.amazon.com/Tine-Pitchfork-Non-Splinter-Fiberglass-Shaft/dp/B…
Or then there is this style....well known for causing splinters !!!!
http://www.ebay.com.au/itm/19th-century-antique-authentic-farm-tool-woo…
One of these would fix the problem
http://www.nzbrush.co.nz/shop/Roading+%26+Industrial/Brooms.html
yeah sure,
http://www.reloaders.co.nz/centerfire+rifle+full+bore/223?product_id=55…
In The US I think you can buy them even in Walmart.
regards
Happy Birthday Gummy bear - have a fantastic day.
One question that rarely gets asked in NZ is: Has the price of Gold been manipulated?
A little bit of recent history pm Gold with a nice wee graph.
http://www.financialsense.com/contributors/rob-kirby/the-federal-reserv…
And another little story on Gold and naked gold shorts.
http://www.globalresearch.ca/naked-gold-shorts-the-inside-story-of-gold…
The problem I have with these pieces is sorting out actual fact from biased make believe.
ie some ppl believe that gold's true value should be $3000US an ounce (or more) and hence when it drops to $1300US an ounce just dont blieve that their speculative greed didnt pay off and it was the Govn/Fed/martians who buggered them and made them take huge losses.
It has to be the Fed/Govn of course, it cant be JPM fiddling the market....oh no.
Lesson,
1) Make sure you are following a robust economic model and not one you want to believe is sound as it matches your political beliefs but in reality bears no relationship to the real world.
2) The market could be fiddled, by whom doesnt matter, so place your bets allowing for this, if you cannot, dont bet.
regards
A sign of the times for singletons in London: fuggetabouda house, it's 9 times yer salary.
And, DC, that there 'employment gain' was part-timers (+800K): the out-of-workforce (and existing on what???) is a growth business, and full-timers are declining. The ACA effect (<30 hours takes an employee out of the ObamaCare net) is biting hard......The U4/U5/U6 numbers aren't pretty, and the 'seasonally adjusted' are - well - adjusted......
Contain yer enthusiasm....
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