VTI - Yes You Should Believe Your 'Lying Eyes'

2024-06-10 10:47:59 ET

Summary

• According to recent governmental reports, job creation is strong, and inflation is hovering at just north of three percent.
• However, in reality, inflation is higher than being reported and the jobs market is weaker.  In addition, the U.S. economy is clearly slowing.
• What does that portend for a market that trades for north of 21 times forward earnings on the S&P 500?  My thoughts follow in the paragraphs below.

There are three kinds of lies: lies, damned lies, and statistics .”? Mark Twain.

The yield on the 10-Year Treasury (US10Y) surged nearly 15bps Friday after the May BLS Jobs Report showed 272,000 positions created last month, which easily beat even the high estimate. I would take this the jobs report with a massive grain of salt, however. It comes off a much weaker than expected April BLS report, for starters. Second, the seasonal adjustments within the "birth/death" model accounted for 231,000 of these positions. The adjustments have also been responsible for roughly half of all jobs " created" over the past 13 months....

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