Dismal Hiring Number

US index futures were trading at seven-month highs this morning, at least until this morning’s jobs number offered a major disappointment.  Companies slowed their hiring drastically in May, as people dropped out of the labor force, a bleak picture for Fed officials as they prepare to debate increasing short-term interest rates at a policy meeting this month.  Nonfarm payrolls rose by a seasonally adjusted 38,000 in May (versus expectations of 162,000), the weakest performance since September 2010.  The silver lining: unemployment has fallen to 4.7% (WSJ)

The negative yield club just keeps growing.  With central banks in Europe and Japan adopting negative interest rates, $10.4tn of sovereign debt carried negative yield in May, this according to ratings agency Fitch.  What does this mean?  For investors, buying negative yielding sovereign debt means that you’re paying the government to loan them money.  (FT)

The country’s biggest beer and coffee makers are coming together for a tea. AB InBev and Starbucks have announced an agreement for the brewer to produce, bottle and distribute a ready-to-drink line of Starbucks’ Teavana brand tea in the U.S. that will launch in 2017. The initiative will help Starbucks broaden its reach beyond coffee, and help AB InBev fill capacity at breweries while its U.S. beer volumes remain under pressure. (SA)

S&P 500 futures are down 7 and NASDAQ futures are down 11.  MSCI International Index is up 1/5 of a %.

Oil’s rollercoaster ride continued this morning as investors digested the fall-out from Opec’s latest meeting in Vienna which ended without a coherent strategy to rebalance the world’s over-supplied markets.  Oil is now down just $ .07 at $49.12 a barrel.

Gold is up $22 at $1235 a Troy ounce.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

If you would like an audio version for use every business morning contact Troy Reinhart at Northwest Quadrant Wealth Management

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Financial Focus • June 3, 2016


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