Yesterday afternoon, we presented readers with the latest Jeff Gundlach webcast and presentation, in which the DoubleLine fund manager was surprisingly non-committal in his outlook on the future, predicting no imminent – or even belated – recession and adding there is no risk of a high-yield junk bond “meltdown.”
Among other things, the sanguine Gundlach touched on US policy, saying that with healthcare legislation overhaul derailed, U.S. tax cuts will be “really, really hard to get done.”
He told Reuters following the webcast that repealing and replacing Obamacare “was always going to be hard to get done. But, yes, the first round failure to repeal is a negative omen” later telling Reuters’ Jennifer Ablan that repealing and replacing Obamacare “was always going to be hard to get done. But, yes, the first round failure to repeal is a negative omen.”
Gundlach also remarked on one of Wall Street’s darlings du jour, namely Tesla, which yesterday surpassed GM briefly in market cap, and which he called a “momentum stock.” He told Reuters: “As a car company alone, Tesla is crazy high valuation. As a battery company – one that expands and innovates substantially – maybe the valuation can work.”
Wednesday kicks off the jobs week properly with our first sniff at US employment. Even with the recent tweeks to the ADP model, it still has a propensity to be wide of the mark.
ADP vs NFP
That’s alright though, it’s not the NFP and never will be but it remains a good gauge for the jobs report nonetheless, if only to give us a sense of direction, or potentially flag any problems.
A steady 185/187k is forecast today (depending on what calendar you’re looking at (those two numbers are from BBG & Rtrs)). The high estimate is 291k, the low 140k. Last month’s 298k blew away the 190k expectations. Last month’s NFP also beat expectations by 235k to 190k. NFP is forecast around the 175k mark at the moment.
As has been the case with the employment reports of late, the numbers don’t really mean much, while they stay steady. It’s still all about the wage numbers. Unless we get something sub 100k or over 350k, the dollar is unlikely to do much, and it’s likely to do more on a big miss than a big beat.
Michel Barnier, the EU’s chief Brexit negotiator, has dampened hopes for a speedy UK exit and trade deal, warning talks will be bedeviled by details over the next two years.
“Theresa May’s [Article 50] letter seeks a rapid agreement, but quite clearly the devil is going to be in the detail. The six months work I’ve done so far points to that”, said Mr Barnier, addressing MEPs in Strasbourg on Wednesday.
The former French foreign minister, who will be carrying out Brexit negotiations on behalf of the EU, said Britain’s desire to carry out its divorce talks alongside arrangements for a free trade deal was a “very risky approach”.
“We are not proposing this to be tactical or to create difficulties. It is an essential condition to maximise our chances of reaching an agreement together in two years. It is our best chance to build trust before proceeding to the second phase.”
Two Japanese retailing groups soon will accept bitcoin payments, a move that is likely to promote wider use of the virtual currency among domestic consumers.
Electronics chain Bic Camera is teaming up with Tokyo-based bitFlyer, which runs the largest Japanese bitcoin exchange. This Friday, they will begin a trial run of bitFlyer’s bitcoin payment system at Bic Camera’s flagship shop in Tokyo’s Yurakucho district and at Bicqlo Bic Camera, the hybrid outlet with Uniqlo located in Shinjuku.
Customers are allowed to pay up to 100,000 yen ($904) using the cryptocurrency, and they will also get reward points at the same rate as for cash payments. Bic Camera may introduce the payment system at other locations based on usage trends at the two Tokyo stores.
Recruit Lifestyle, the retail support arm of human resources conglomerate Recruit Holdings, is partnering with another Tokyo bitcoin exchange operator, Coincheck. The virtual currency will become a payment option at shops that have adopted AirRegi, the point-of-sale app developed by Recruit Lifestyle, by this summer.
By using tablets or other devices provided by the store and one’s own smartphone, the customer can deduct the amount on the bill from the designated bitcoin account. Coincheck will convert the bitcoins into yen and transfer the funds to the store.