Thoughts From The Divide: Breaking up is hard to do

Posted on June 5, 2025

Friday is a Non-Farm Payroll day, and the early indications have pointed to a softer report. Private sector hiring, as reported by ADP, rose by just 37,000 in May, the lowest in more than two years. The weekly claims data added to the impression of softness in employment, hitting a seven-month high. While 247,000 claims are hardly a collapse, it might indicate less “fat” in the labour market, meaning that the Labour market doesn’t have the momentum it had in ’22. Or as Claudia Sahm put it, “Any signs of weakness in the data this week would stoke fears of a recession again. It’s too soon to see the full effects of tariffs, DOGE, or other policies on the labour market; softening now would suggest less resilience to those later effects, raising the odds of a recession.”

Substack Link:  bit.ly/3SDcdvi

Other posts

Thoughts From The Divide: Signals vs Omens – Sept 6

BY JON WEBB
Call me superstitious, but some irrational part of me can’t help but think the disappointment surrounding the Nvidia results had wider significance. Like  Mary Poppins leaving when the wind changes, sometimes it’s something mundane which, with the benefit of hindsight, signals a shift in sentiment. It’s not that Nvidia never disappoints, but it has come to feel like that recently. And since the Nvidia results, stocks do seem to have lost their mojo, in marked contrast to bonds. Read more →

C8 Currency Compass – March 2025 – ‘Trade Wars are Good and Easy to Win’ Pres Trump (2018)

BY JON WEBB
Our January switch to USD weakness has worked well.  The USD models are more neutral now.  US tariffs have had a mixed USD reaction to the various currencies.  The other country's response and context matters. Read more →

C8 Weekly Bulletin: The asset class ‘du jour’ – corporate bonds!

BY JON WEBB
The latest Financial Times opinion piece 'The Long View' flags investor interest in an exciting new asset class – not crypto, not AI-driven stocks… but newly higher-yielding corporate bonds! January data on ETF inflows certainly underlined the revived US investor appetite for fixed income with overall inflows running slightly of those into equities. Amid this constructive backdrop, USD and EUR corporate bond markets begin 2023 on a robust note.  Read more →
Back to all posts →