What Traders are Talking About:
* May non-farm payrolls very disappointing. The U.S. economy added just 69,000 non-farm payrolls last month versus expectations for jobs growth of 150,000. The unemployment rate ticked up to 8.2% from 8.1% in last month's report. Economists were expecting the unemployment rate to hold steady. In addition, March and April non-farm payrolls were revised down a combined 49,000 from previous forecasts.
The long and short of it: The weak jobs data adds to the negative macro-economic tone and is triggering a strong risk-off attitude throughout the investment world.
* China's official May PMI lower than expected. China's official purchasing managers' index (PMI) dropped to 50.4 in May from 53.3 in April, according to the National Bureau of Statistics. Economists had expected a PMI reading of 52. While the figure showed expansion in China's manufacturing sector for a sixth straight month, both new orders and export orders declined, signaling a slowdown in domestic consumption and weakening demand from overseas. Meanwhile, the final HSBC PMI came in at 48.4 -- down from the flash estimate of 48.7 last week and 49.3 in April. That's the seventh consecutive month of contraction in China's manufacturing sector based on HSBC data.
The long and short of it: Further signs of a slowdown in economic activity now have many economists expecting Chinese second quarter GDP to fall below 8% for the first time since 2009. It also means pro-growth monetary policy moves are likely soon.
* Rainfall totals encouraging for some, disappointing for others. Most of the Corn Belt got some rain over the past 24 hours, although some areas didn't get as much as hoped -- or needed. For a 24-hour precip map for the Corn Belt, click here. The heaviest rains were concentrated in northern Illinois, northern Indiana and southern Michigan, areas that needed rain but were far from the neediest. Radar shows some rains are still falling in the extreme eastern Corn Belt this morning and there are a few scattered showers in the far western Belt, but this rain event has mostly played out. Conditions are now expected to be dry, with warmer temps returning through next week.
The long and short of it: The return of warm, dry conditions after the rain event means areas that received limited rainfall will continue to face crop stress. Key will be whether traders put more focus on weather or macro-economics ahead of the weekend and for next week's trade.
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