Private nonfarm payrolls in the US are projected to increase by 211,000 (seasonally adjusted) in tomorrow’s update for June from the Labor Department, based on The Capital Spectator’s average point forecast for several econometric estimates. The prediction reflects a substantially lesser gain vs. the 262,000 advance in May.
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The markets staggered to the year’s midpoint with a thud, with most of the major asset classes suffering losses in June. The exception: broadly defined commodities (Bloomberg Commodity Index), which posted a modest 1.7% gain last month. The rest of the field was either flat or (in most cases) in the red. The big loser: US real estate investment trusts (REITs), which shed a hefty 4.6% in June, based on the MSCI REIT Index, leaving this measure of securitized real estate off by more than 6% so far in 2015.
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● Greece in default as eurozone set to discuss new bailout proposal…
● US consumer confidence rises in June, beats forecasts…
● US S&P/Case Shiller Home Price Index annual pace eases to 4.2% gain in April…
● PMI: Initial estimate of euro area manufacturing growth in June confirmed…
● As China’s manufacturing activity posts slight improvement in June.

The ISM Manufacturing Index is expected to tick fractionally lower to 52.7 in tomorrow’s update for June vs. the previous month, based on The Capital Spectator’s average point forecast for several econometric estimates. The prediction is still above the neutral 50.0 mark and so the current outlook still calls for moderate growth for this benchmark of economic activity in the US manufacturing sector.
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Private nonfarm payrolls in the US are projected to increase by 200,000 (seasonally adjusted) in tomorrow’s June update of the ADP Employment Report, based on The Capital Spectator’s average point forecast for several econometric estimates. The average projection is fractionally below May’s increase.
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The escalating Greek crisis has raised new questions about the timing of the Federal Reserve’s plans for the first US rate hike since 2006. But by some accounts, it’s still mostly noise on this side the Atlantic. “This isn’t a ‘watch Greece’ situation,” says Roberto Perli, a former Fed staffer who’s now at Cornerstone Macro. “While we have chaos in Greece, there are no signs of dramatic contagion yet, and that’s why it doesn’t change the Fed’s tone.”
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● Greece is set to default at the end of today…
● But the Greek crisis isn’t expected to delay the Fed’s first rate hike…
● Meanwhile, US pending home sales rose to a 9-year high in May…
● As Puerto Rico faces bankruptcy…
● Eurozone inflation ticked lower this month while the jobless rate remains stable but elevated at 11.1%…
● And Germany’s unemployment remains close to an historic low in June as retail sales increased for a second month in Europe’s largest economy.

We’re all backtesters in some degree, but not all backtested strategies are created equal. One of the more common (and dangerous) mistakes is 1) backtesting a strategy based on the historical record; 2) documenting an encouraging performance record; and 3) assuming that you’re done. Rigorous testing, however, requires more. Why? Because relying on one sample—even if it’s a real-world record—doesn’t usually pass the smell test. What’s the problem? Your upbeat test results could be a random outcome.
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● Greece is on the brink… again still, but this time it’s far more acute as the government closes banks and imposes capital controls, pushing the beleaguered nation closer to default and a hasty exit from the euro…
● Meanwhile, back in the US, the University of Michigan’s Consumer Sentiment Index increased to its highest reading since January in this month’s preliminary reading. “An improving economy was the most important component,” said the chief economist for the survey…
● Eurozone economic confidence in June retreated, according to the European Commission’s revised survey data…
● And China cut interest rates to a record low after a sharp decline in the stock market.

● The Misfit Economy: Lessons in Creativity from Pirates, Hackers, Gangsters and Other Informal Entrepreneurs
By Alexa Clay and Kyra Maya Phillips
Review via Financial Times
Hackers, pirates and swindlers, rather than visionary chief executives, should be the inspiration for business leaders. That is the view set out in “The Misfit Economy,” by Alexa Clay and Kyra Maya Phillips.
The book’s principal contention is that “the free market economy does not possess a monopoly on innovation.”
They suggest five key principles to help discover your “inner misfit.”
They are hustling (“spotting an idea and going for it”); copying (which they describe as “collective innovation”); and hacking (taking on the establishment and getting “to know a system intimately in order to more effectively take it apart”).
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