Wow, we are getting hammered today! Stocks are down hard after the ADP employment report showed only 38,000 jobs added last month (economists were expecting an add of 175,000), and the ISM index was down to 53.5 (economists were expecting 57.1). Ugly, ugly, ugly.
The 10-year treasury broke below 3% in yield. I feel that bonds are in a bubble. Long maturity bonds are especially vulnerable to price declines when rates start to rise. We also saw Australia’s GDP growth for the first quarter at -1.8%. China is also struggling, with the slowest pace of manufacturing growth in 3 quarters. European problems persist. There are a lot of reasons to be cautious at present.