Per Wednesday’s commentary, futures are trading lower this morning on today’s strong jobs report; that’s your cue to start scratching your head.
Even crazier, you should expect to hear anytime now from folks who should know better (like, say, the President’s ECONOMIC TEAM!?!, and, alas, the man himself) that, “see, the Fed is the problem”.
No, the Fed is absolutely not the problem! The “problem” — and, yes, there is a problem as the market rests near all-time highs — is captured in the latest producer commentary from this week’s Institute for Supply Manager Surveys:
“New residential sales are off the typical pace by 10 to 15 percent year over year. Tariffs are working their way through the system, raising costs on finished materials.” (Construction)
“The largest business condition impacting general purchasing operations is the increased cost of goods due to the tariffs placed on China.” (Retail Trade)
“Closely watching the Trump tariffs on China, which could significantly impact medical supplies.” (Health Care & Social Assistance)
“China tariffs and pending Mexico tariffs are wreaking havoc with supply chains and costs. The situation is crazy, driving a huge amount of work [and] costs, as well as potential supply disruptions.” (Computer & Electronic Products)
“Tariffs are causing an increase in cost of goods, meaning U.S. consumers are paying more for products.” (Chemical Products)
“[We] shifted shipments to China from our U.S. plants to our Canadian and European plants because of tariffs.” (Food, Beverage & Tobacco Products)
“Tariffs continue to adversely impact decisions and forecasting. Our increasing fear is that current trends will weaken the global economy, influencing our ability to grow in 2020 and beyond.” (Fabricated Metal Products)
“Seeing higher prices due to tariffs and tariff-related supply chain issues.” (Machinery)
Well, even before I hit the publish button, this tweet from Zero Hedge:
“LOL: KUDLOW SAYS FED SHOULD TAKE BACK INTEREST RATE HIKE”
“Kudlow” being the President’s top economic adviser. I kid you not!!