Eurodollar University

Roaring Kitty is not the problem, nor is Gamestop the company and its stock. All are symptoms of a degraded model that increasingly rewards all the wrong behaviors. Stocks have become lottery tickets, the pie-in-the-sky way out for way too many Americans otherwise trapped in a real economy that continues to leave them behind - as the latest employment report proves. Eurodollar University's conversation w/Steve Van MetreRoaring Kitty Livestream 6/7/2024https://www.youtube.com/watch?v=U1prSyyIco0&t=658sThe Hill GameStop shares plunge, halted during Roaring Kitty livestreamhttps://thehill.com/business/4710147-gamestop-shares-trading-roaring-kitty-livestream-meme-stock/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This has never happened before. Sure, the payroll data and CPS series have diverged before but this is something entirely new. The fact that it runs contrary to decades of history makes our determination rather easy and simple: the labor market noose is tightening. Eurodollar University's Money & Macro AnalysisBloomberg Big US Job Gains Is Out of Sync With Recent Weaker Economic Datahttps://www.bloomberg.com/news/live-blog/2024-06-07/us-employment-report-for-mayhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

European Central Bank President Christine Lagarde and Vice-President Luis de Guindos discuss the ECB's rate cut decision, the inconsistency in inflation data, and the implications on the economy, credit, and global risks, questioning the reliance on outdated economic theories.

More labor market cracks are showing and expanding. Even some of the data which has been resilient may have to be substantially changed given new information that just came to light. Labor weakness continues to clear out the FOMC setting the Treasury market up the next rally - though it isn't quite there yet. Eurodollar University's Money & Macro AnalysisADP National Employmenthttps://adpemploymentreport.com/ADP Pay Insightshttps://payinsights.adp.com/?_ga=2.165121663.1500609015.1717601960-340309474.1717601960BLS QCEW Overviewhttps://www.bls.gov/cew/overview.htmBLS QCEW https://www.bls.gov/news.release/cewqtr.nr0.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

As more weak data pours in on the US economy, the more clarity it offers on the future path of ST interest rates. As that clears up, market rates are moving lower. But why? Mainstream theory demands we consider rates as entirely supply or demand factors (like QE). Yet, the past couple years have thoroughly disproven the idea. Rates are going lower because that's where and what the fundamentals are. Eurodollar University's Money & Macro AnalysisBloomberg Majority of Middle-Class Americans Say They Struggle Financiallyhttps://www.bloomberg.com/news/articles/2024-06-04/two-thirds-of-middle-class-americans-face-hardship-in-poll?srnd=economics-v2https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A rare warning strikes the gasoline market in another confirmation of economic weakness, one primary factor which forced OPEC this past weekend to extend its production restrictions. On top of those, big changes to US income estimates further corroborating the deterioration, as did a surprise drop in one of the more critical sentiment signals.Eurodollar University's Money & Macro AnalysisReuters Weak US gasoline demand compounds pressure on oil ahead of OPEC+ meethttps://www.reuters.com/business/energy/weak-us-gasoline-demand-compounds-pressure-oil-ahead-opec-meet-2024-05-31/Nikkei  OPEC+ extends deep oil production cuts into 2025https://asia.nikkei.com/Business/Energy/OPEC-extends-deep-oil-production-cuts-into-2025ISM Manufacturing May 2024https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/may/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Weak economic results continue to roll in, matching other sources of information about the US economy. From the Federal Reserve's own account and data to more corporate reports. They all have one thing - and one word - in common. GDP revisions plus the first update on the state of GDI and its bigtime mismatch. Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Tensions are rising. Aggressive actions are becoming commonplace. This isn't just sabre-rattling and posturing as war is a real possibility. It's not difficult to see why, at least what some of the motivation is. China's central bank is publicly discussing even more highly unusual steps to try to reign in the unfolding financial and economic backlash which was just confirmed by even more data. Eurodollar University's Money & Macro AnalysisBloomberg US Commander Warns China Is Fast Becoming More Aggressive in Regionhttps://www.bloomberg.com/news/articles/2024-04-23/us-commander-warns-china-is-fast-becoming-more-aggressive-in-regionBloomberg Xi’s Cryptic Bond Comments Hint at PBOC Becoming More Like Fedhttps://www.bloomberg.com/news/articles/2024-04-01/xi-s-cryptic-bond-comments-hint-at-pboc-becoming-more-like-fedCNBC Philippine president says killing of a Filipino in South China Sea clash would be ‘very close’ to act of warhttps://www.cnbc.com/2024/05/31/ferdinand-marcos-jr-philippine-president-talks-red-lines-in-south-china-sea.htmlBloomberg Marcos Swipes at China, Vowing Not to Yield in Disputed Seahttps://www.bloomberg.com/news/articles/2024-05-31/marcos-swipes-at-beijing-in-vow-to-not-yield-in-south-china-seaBloomberg China Ramps Up Warning on Bond Frenzyhttps://www.bloomberg.com/news/articles/2024-05-31/china-ramps-up-warning-on-bond-frenzy-with-pboc-selling-in-focusDow Jones Chinese State Media Hint at Possible PBOC Bond Sellinghttps://www.morningstar.com/news/dow-jones/202405311908/chinese-state-media-hint-at-possible-pboc-bond-sellingNikkei Asia Foreign direct investment in China falls to 30-year lowhttps://asia.nikkei.com/Economy/Foreign-direct-investment-in-China-falls-to-30-year-lowhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

More corporate mayhem brought on by the "uncertain market environment." Stocks of both Salesforce and Kohl's were hammered today as each company demonstrates in their own way just what the updated GDP numbers suggest. That latter data report also includes GDI which is almost certainly closer to the real economy all these other sources are projecting. Eurodollar University's Money & Macro AnalysisCNBC Salesforce shares tumble 20%, on pace for worst day since 2004https://www.cnbc.com/2024/05/30/salesforce-stock-fall-earnings-revenue-miss.htmlBloomberg  Salesforce Shares Plunge by Most Since 2008 After Weak Outlookhttps://www.bloomberg.com/news/articles/2024-05-29/salesforce-gives-weak-sales-outlook-with-slowdown-fears-growingCNBC Kohl’s stock plummets 25% after massive earnings misshttps://www.cnbc.com/2024/05/30/kohls-kss-earnings-q1-2024.htmlKohl's Kohl's Reports First Quarter Fiscal 2024 Financial Resultshttps://investors.kohls.com/news-releases/news-details/2024/Kohls-Reports-First-Quarter-Fiscal-2024-Financial-Results/default.aspxBEA  Gross Domestic Product, First Quarter 2024 (Second Estimate) and Corporate Profits (Preliminary)https://www.bea.gov/news/2024/gross-domestic-product-first-quarter-2024-second-estimate-and-corporate-profitshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

More CRE developments today and last week this time with a focus on Europe. New reports indicate losses are coming soon and data from the ECB shows why there are so many concerns. We also have the latest bank lending figures which show more troubling signs under the cover of 'extend and pretend.'Eurodollar University's Money & Macro AnalysisECB Commercial real estate and financial stability – new insights from the euro area credit registerhttps://www.ecb.europa.eu/press/financial-stability-publications/macroprudential-bulletin/html/ecb.mpbu202210_4~0aa7d44e15.en.htmlReuters Explainer: European banks and their $1.5 trillion commercial property headachehttps://www.reuters.com/business/finance/european-banks-their-15-trillion-commercial-property-headache-2024-02-15/S&P Global Investors expect surge in bad commercial real estate loans at European bankshttps://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/investors-expect-surge-in-bad-commercial-real-estate-loans-at-european-banks-81618608FitchRatings Global Contagion Risk Growing from Rising CRE Losses, Led by Officehttps://www.fitchratings.com/research/non-bank-financial-institutions/global-contagion-risk-growing-from-rising-cre-losses-led-by-office-02-04-2024https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU