This week, our 3 Things are:<br>Jobs’ weakness. The June report confirms all is not well.<br>Q2 earnings. We’re set up for a strong quarter.<br>Robust consumer spend. So says one well-informed observer.

Jobs’ Weakness, Q2 Earnings, and Robust Consumer Spend. 

Van Hesser's 3 Things in Credit - A KBRA Podcast

Welcome market participants to another 3 Things in Credit. I'm Van Hessers, Chief Market Strategist, KBRA. Each week we bring you 3 things impacting credit markets that we think you should know about. So earnings season is underway and expectations are double the prior record outside of recoveries from recessions. Let that sink in. Strong productivity gains and modest wage gains form a highly constructive underpinning to earnings growth. Now mix in the ripple effects from the ongoing powerful wave of tech cap-backers,

and an oil spike and you have the makings of, well, another extraordinary earnings quarter. Let's enjoy it while it lasts. This week our 3 things are 1. Jobs Weakness. The June report confirms all is not well. 2. Q2 Earnings. We're set up for a strong quarter. 3. Robust Consumer Spend. So says one well-informed observer. All right, let's dig a bit deeper. Jobs Weakness.

I think Kevin Warsh is right in setting up a task force to look at how we look at the labor market. It's amazing to me the degree to which there are opposing views of the health of the jobs picture. Look no further than FOMC thought leader Chris Waller who, in the space of a couple of months, called the labor market on one hand weak and fragile, while on the other, stabilizing with unemployment fairly low and stable. And that's before the June jobs report. Now speaking of that report, markets shrugged it off as okay.

When you peel that onion, it's hard to make the case at all as well. Yes, the unemployment rate came down a tick to a low 4.2%, but that's largely attributable to the labor participation rate falling to its lowest level, 61.5%, in five years.

Jobs’ Weakness, Q2 Earnings, and Robust Consumer Spend.

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Jobs’ Weakness, Q2 Earnings, and Robust Consumer Spend.

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.