Europe is cutting rates.China is cutting rates.The FED is next! 🚀 https://t.co/9dP1q2qaVC ...

Hey everyone and thanks for jumping back into the macroverse. Today we're going to talk about the recent labor market reports this week and how it is affecting markets. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on into the cryptoverse premium at into the cryptoverse.com. If you're curious about this stuff uh more timely, we do have the ITC macro Twitter account that you can follow along with. I'll also tweet stuff out from m ...

Economic Outlook - The employment report is weaker than expected due to downward revisions, raising recession fears, but the analysis suggests a "rolling recession" [2] - The expectation is for a strong recovery, possibly starting as a "rolling recovery", with upside surprises in real growth and productivity, and downside surprises on inflation by the midterm elections next year [5][6] - Geopolitical risks remain, particularly concerning Russia-Ukraine, China, and Mexico, but the biggest uncertainty is the Federal Reserve's (Fed) policy [7][8] Fiscal Policy - Year-to-date deficit as a percentage of GDP has shrunk from approximately 73% to 62% [10] - Tariffs are annualizing at an estimated $450 billion per year, potentially leading to a deficit of roughly 47% of GDP [10] - The analysis suggests that the deficit as a percentage of GDP could reach 3% by the end of 2026, two years ahead of the Treasury Secretary's objective [11][12] - Approximately 75% of capital spending will benefit from permanent expensing, which is expected to attract manufacturing back to the United States and boost productivity [18] - Factoring in expensing, the US corporate tax rate could effectively drop to the 12-14% range [19] Monetary Policy - Despite Chairman Powell's hawkish tone, the data suggests the Fed may ease, with odds for a rate cut in September up to 88% and a 50 basis point rate cut at approximately 25% [4] - Real private domestic final sales are growing at approximately 1%, indicating cautious consumer behavior and a rising savings rate, potentially crossing 5% this year [21][22] - The 2-year Treasury yield less the 3-month Treasury yield is below zero, indicating restrictive monetary policy, which historically precedes recessions [26] - Truflation, which measures thousands of items in real time, suggests that inflation may stabilize and then decline towards or below 2% [33][24] Market Indicators - Economic policy uncertainty reached unprecedented levels during tariff turmoil, even higher than during the 2008-2009 financial crisis and the COVID-19 pandemic [36] - Revisions to non-farm payrolls were extreme, typically seen only in recessions, confirming the "rolling recession" [47] - Federal government employees are down by 84000 year-to-date, with an expected additional 150000 layoffs by the end of September, potentially impacting consumer confidence [48][49] - The consumer confidence index shows a decline in jobs being easy to get, suggesting potential economic weakness [51][52]

Labor Market Data & Politics - The accuracy and volatility of jobs data are questioned, with concerns about potential political influence on data calculation and interpretation [2][4][5] - The administration is perceived to be concerned about political undercurrents affecting data, potentially leading to preemptive actions regarding appointments [2][3] - There's a call for improving the quality of data and allocating more resources to ensure accuracy, especially given revisions in job performance metrics [6][7] Trade Deals & Market Catalysts - Approximately 70% of trade deals have been "inked," but not finalized, with focus shifting to the China deal as a potential market catalyst [8] - The market's reaction to trade deals is diminishing compared to earlier periods, with monetary policy expected to be a more significant driver [10][14] - The negotiator's strategy involves creating disruption to bring trading partners to the table and secure fairer deals for the United States [11][12] Monetary Policy & Economic Impact - Monetary policy is expected to drive markets more than trade deals, especially as investment from enacted bills filters through economic data [14] - The market is conditioned to understand the negotiator's techniques, reducing fear when large numbers are announced in trade negotiations [12] - Examples like Switzerland suggest that initial high numbers in trade disputes can be negotiated down through concessions and investments [12][13]

Labor Market & Economic Outlook - US labor market shows warning signs with payrolls tumbling and unemployment rate rising, indicating a deceleration in job gains [1][2] - Concerns mount over a complicated mix for the Federal Reserve to deal with, leading to expectations of potential rate cuts in September and December [2][3] - Slowing services wages suggest a potential slowdown in consumption and the overall economy, justifying lower interest rates even without a formal recession [19] - The economy is structurally sound, but current policy may be suboptimal, with rates disproportionately hurting lower-income households as housing and labor markets slow [9][10] Interest Rate & Monetary Policy - Fed rate cut bets for September have reached nearly 90%, a significant increase from 45% prior to jobs data, with two rate cuts priced in for the year [6] - The Cleveland Fed President acknowledges a tricky time for monetary policy makers due to conflicting mandates, requiring careful data analysis and business conversations [7][8] - The market anticipates bull steepening as the economy slows and the Fed cuts rates, potentially spurring inflation or growth, leading to a V-shaped recovery [12] - Neutral rate is difficult to determine, potentially higher than expected due to shifts in household and business debt structures, allowing for higher interest rates with a robust economy [17][18] Bond Market & Credit Issuance - US high-grade weekly volume reached $12 million, driven by foreign bank sales, while July volume was $81 billion, the lightest month for supply this year [29] - US high-yield July volumes exceeded $35 billion, marking the second busiest month since September 2021 and the busiest since at least 2006 [30] - Leveraged loan launches in July set a record, reaching over $222 billion, the fourth time in 14 months an all-time record has been broken [30] - Private sector holds $225 trillion in cash, exceeding marketable Treasury debt, with only $29 trillion in high-quality bonds, creating a transcendent influence on the market [26][27]

Labor Market Analysis - The labor market shows signs that should be watched carefully, with headline numbers coming down [2] - Unemployment remains within the 41% to 43% range for the past year, indicating a healthy labor market that is still well in balance [2] - The labor market is largely in balance, but dynamism is lacking, making it harder to find a job if one doesn't have one [4][5] - Businesses fought hard to assemble and train their labor force and are reluctant to let them go, but this may not last if demand decreases [10] - Potential weakening on the labor side is anticipated, which might warrant a response, balanced against inflation concerns [11][12] Inflation and Tariffs - Inflation is a bigger and longer-lasting problem, with the Fed missing its target for four and a half years [5] - People are feeling the pain of inflation, making difficult choices and finding their $400 emergency fund doesn't stretch as far [6] - The US is missing more on the inflation side than on the employment side [7] - Expectation is that inflation numbers will tick up, with $30 billion a month in tariff revenues being paid by someone [13] - Importers have borne a lot of the tariff costs to date, but they can't absorb those costs anymore and will start pushing that out into prices to consumers [14] - Inflation is expected to continue to tick up into the end of this year [15] Monetary Policy and Economic Outlook - Uncertainty has been high for businesses, making it difficult to make investments and execute plans [9] - The economy is operating right around a neutral long-term rate, and the current stance is modestly restrictive [16] - September is a realistic possibility for a rate move, but one month's data is not determinative [17][18] - It's a tricky time for monetary policymakers, as both sides of the dual mandate (maximum employment and stable prices) could potentially be in conflict [20][21] - Companies have been delaying, postponing, or scaling back investment plans [23] Fed Credibility and Independence - The speaker has enormous respect for Chair Powell, who acts with integrity and aims to do what's best for the American people [26][27] - Independent central banks lead to better economic outcomes [31]

Monetary Policy - South Africa's central bank unilaterally lowered its inflation target [1] - The finance ministry insists it alone holds the authority to set policy [1]

In 2020 and 2021 the combination of loose monetary and fiscal policy was often credited for the surge in speculation. That cannot be the explanation today, when trading remains far above what was previously considered normal https://t.co/p9ycM9T1zY ...

The US economy rebounded in the second fiscal quarter of the year, growing at a better thanex expected rate despite President Trump's tariffs. The country's GDP grew at a 3% pace from April to June, reversing a.5 decline from the previous quarter. Consumer spending also rose.But the growth comes despite a sharp decline in imports, which dropped by 30.3%. The Wall Street Journal editorial board called it the weirdest GDP report ever, while President Trump touted the growth as a success. all expectations.They ...

Core Insights - The real estate market showed signs of recovery in the first half of 2025, with increased sales contracts and strong interest in new projects [2][24] - The company signed a total of 52 sales contracts in the first half of 2025, a decrease from 63 in the same period of 2024, with significant contributions from the Luuslangi and Regati projects [2][4] - The average weekly sales ratio reached its highest level in recent years, exceeding 4% in May 2025, indicating a robust market activity [3] Sales Performance - In Q2 2025, the company signed 31 sales contracts, compared to 25 in Q1 2025 and 47 in Q2 2024 [2] - The sales revenue for Q2 2025 was EUR 7.388 million, a decrease from EUR 8.546 million in Q2 2024 [5][12] - The net profit for Q2 2025 was EUR 974 thousand, an increase from EUR 443 thousand in Q2 2024 [5][13] Financial Position - Total assets increased by EUR 6.34 million to EUR 95.149 million at the end of Q2 2025, primarily due to the construction of the Regati project [7][11] - Total borrowings rose by EUR 1.856 million to EUR 59.540 million, with new construction loans drawn during the quarter [8] - The balance of cash and cash equivalents decreased by EUR 342 thousand to EUR 9.574 million [7] Market Trends - The number of apartment transactions in Tallinn increased by 6.9% in Q2 2025 compared to Q1 2025, indicating a rise in buyer activity [24] - The stock of unsold ready-to-move-in apartments remained stable at around 1,000 units, suggesting sustained market competition [26] - The average gross wages rose by 7.5% year-on-year in Q2 2025, outpacing consumer price inflation, although consumer confidence remained low [23] Future Outlook - The company anticipates an increase in sales contracts and construction activities in the second half of 2025, supported by new projects added to its portfolio [27][28] - Expectations for continued economic recovery and demand for new residential real estate are present, although dependent on external factors such as interest rates and consumer confidence [28] - The company forecasts a potential revenue of up to EUR 55 million in 2025, with significant revenue generation expected in the second half of the year [31]