SVET Weekly Markets Update (July 2, 2022)
On Tuesday July 05 2022 at 09:00 AM ET the Census Bureau of the U.S. Department of Commerce will publish the Factory orders report (Full Report on Manufacturers’ Shipments, Inventories and Orders).
Because this is, essentially, an extension of the Durable Goods Report published by Bureau earlier, its influence on stock / crypto prices is expected to be negligible.
Still, it is an important part of the macroeconomic puzzle for those of us who like to get into the nytty-gritty of economic mechanics underlying some of the tokens usability rational. Durable Goods report is based on 5,000 manufacturers survey of about 5 thousands producers and relates to all goods with more than 3 years life-span.
For example, expanding factory orders for those type of long-lasting products can be viewed as a booster by strategic (e.g. VCs) investors into decentralized supply-chain platforms.
However, this logic can’t be applied in the fledgling ‘soft-Orwellian-world’ economy, where highly distributed, hereditary clicks of technologically savvy, nationalistically minded autocrats-bureaucrats shape-shifting into various forms of corporations-organizations will define who-get-whats leaving to all consumers, entrepreneurs and individual investors a role of frightened into the silent obedience subservients.
In May it showed the 0.7% increase in new orders for US-made capital goods (compare to 0.4% in April), which is taken by market players as a bearish sign (naturally, an indication of the expanding US economy is a career-killer for panic-driven FED clerics).
Accordingly, US factory orders is set to grow as well in May (0.5% compare to 0.3% or to $533.2 billion in April).
By far more important piece will be added to the world-jigsaw at Wednesday July 06 2022 (09:00 AM ET) by the Institute for Supply Management execs — the ISM manufacturing index for June.
This ‘leading indicator’ (it is announced on a first business day of each month based on a survey of purchasing managers at about 300 manufacturing firms) is widely used by fundamental analysis driven risk-on investors (readings above 50 mean an economic expansion).
It dropped to 55.9 in May of 2022 (compare to 57.1 in April). It is expected to deteriorate further (54.5) in June.
Any significant deviations from this reading might send shock-waves across all markets, including, crypto.
However, ISM publishing is not the only trigger-event of this week. At the same hour of the same date markets will be hit by the Job Openings and Labor Turnover Survey (JOLTS) report issued by the U.S. Bureau of Labor Statistics (BLS) clerks.
JOLTS (based on 20,000 nonfarm businesses and govs offices surveyed by BLS) shows hires and layoffs across a broad range of industries. Job openings have been growing steadily during previous 11 months thanks, mostly, to unsubstantiated growth-ambitions of US corps.
In April 2022 it stood at 11.4 million compare to 9.6 in May 2021. In May 2022 it is expected at 11.3 million. However, some puts its on 11.05.
Although, formally, it has nothing to do with crypto, where an unemployment is a fantastic beast found in legends only, an upcoming JOLTS publication might shape BTC curve for weeks ahead.
Obviously, all economic indicators closely correlate with each other for they speak essentially the same old fear-and-greed-tale about markets everlasting expansion-contraction cycles.
So, no none expects that when, on Friday July 08 2022 at 07:30 AM ET, BLS produces its estimate of US unemployment rate, it will contradict what players had already extrapolated from all previous readings regarding the present state of the US workforce.
Nonetheless, this controversial indicator bears the above average significance for politicians, which love to imagine the planetary economy to be a big SUV, obedient to DMV rules even with an idiot sitting behind the wheel.
From this uninformed point of view the US economy is doing marvelously well at present, which gives the FED a mandate to pound the markets into the ground.
The unemployment rate has been falling from 5.9% in May 2021 reaching 3.6% in February 2021 and then stabilizing there. It is expected to be unchanged in June as well.
Also, upcoming week brings us on Thursday several other notable publications related to the state of US commerce and energy reserves, including, the Balance of Trade, Export / Imports reports and EIA Natural Gas / Oil Stocks Changes.
That concludes my update of the upcoming notice-worthy week.