QI TAKEAWAY — Jerome Powell is spooked enough to finally fade his beloved job openings data he’s known all along to be baseless. In the spirit of not fighting the Fed, we’ll take the messaging he spoon-fed his FOMC voters at face value. Stocks are in a very precarious place as communicated by the Russell 2000. Be as hedged and defensively postured as allowed and hold tight that long exposure to volatility.
- Business births as modeled by the BLS are inflating payrolls despite bankruptcies being at their highest since the GFC; meanwhile, 91% of people are living in states with rising YoY continuing claims, with CA, TX, and FL, up 20%, 34%, and 14% YoY, respectively
- ISM Mfg Backlogs fell to 37.5 in May, the lowest since February 2009, and none of 18 industries surveyed saw growth; notably, ADP Mfg payrolls fell in May, raising the potential for downside surprises in the BLS’s data, given the two have a 0.86 correlation since 2010
- The BLS reported a 1.2% uptick in Retail jobs in April, despite Challenger flagging 45,168 Retail cuts so far this year, up 942% from the first five months of 2022; similarly, ADP’s data showed strength in Mining despite Baker Hughes’ Rig Count falling to a 13-month low