This holiday-shortened week already looks to have something of a trend emerging as of Wednesday’s pre-market: value-oriented cyclical stocks on the blue-chip Dow index seem to be out of favor, while growth-oriented tech stocks on the Nasdaq are in the green. The S&P 500 is again in the middle, roughly flat as of this hour.
Ahead of today’s open, we don’t see any new economic reports, and we’re still a week away from Q2 earnings hitting their busy season. There is a
“Billionaire Summer Camp”
happening in Sun Valley, ID as of today, including invite-only executives from film, tech, design and sports. But we don’t expect much newsworthy to emerge until at least the billionaires have again dispersed from the rural Northwest.
However, a 1.3%
10-year bond yield
has got investors scratching their heads. Back in Q1 of this year, the 10-year was racing aggressively up over 1.7% — headed for 2%+ with a bullet, seemingly. Yet it stalled out there for a week or two, even as other economic prints were getting predictably hotter. Pulling back to an even-longer stay at around 1.5%, analysts were just beginning to question whether inflation was indeed transitory.
Now at 1.3% and potentially testing 1.0%, the conversation has grown somewhat darker. After a lower-than-expected ISM Services survey yesterday, and with a regulation crackdown currently ongoing in China among some of its biggest tech firms and an accommodative European Central Bank keeping cheap money pumping, perhaps the world is not quite ready for the Great Reopening we in the States have been pining for.
After the opening bell, we get another peek at
Job Openings
, though this report is from May, which is a bit in our rearview at this point. That said, expectations are for in-line from April’s record-high 9.286 million. Since 2021 began, we’ve seen an enormous jump in this particular survey, leaping from steady “6-handles” through the second half of 2020 to where were are now… er, two months ago.
Job openings plummeted as the Covid-19 pandemic caused shutdowns across America last year, bringing us down below 5 million at its low point. Fortunately, this was merely a spike; job openings quickly made their way back toward their earlier trajectory, but were clearly subdued until Covid vaccinations created safer environments for the Great Reopening.
But because we’ve already seen June jobs numbers from both
ADP
ADP
and the U.S. government (BLS), there may be less actionable use for today’s reported job openings for May. For instance, 349K openings in Accommodation/Food Service from before the summer began have been at least partly absorbed by now; bar and restaurant owners have since found that raising pay was a very efficient method to bring back its workforce.
We also will get the minutes from the latest
Federal Open Market Committee (FOMC)
meeting, where discussion of tapering bond buybacks and raising interests in the distant future finally made it into the conversation. FOMC minutes fill in particular details, including where more of the bearish sentiment is originating and how forceful it seemed to be. The potentially dynamic shifts in viewpoint on monetary policy are a tried-and-true forward indicator of future economic realities.
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