[00:03] All right. All right. All right. We got another ADP jobs report. ADP jobs. Let's see how we go today. It's always interesting, always fun, never a dull moment. We got the ADP numbers coming out in about 15 seconds or so. We are
[00:18] out in about 15 seconds or so. We are looking at a survey. Survey says 50,000 is what we're going to be getting for ADP jobs. Last was -32,000. Let's see what we get. Here it comes. Here it comes. 41. That's not bad.
[00:33] 41,000. That's good in my opinion. Uh, obviously it's a lot weaker than what we have seen over, you know, pri prior prior years, excuse me. But, uh, 41,000, that's actually not that bad. uh 41,000 is
[00:48] going to be a number that's not too hot uh where we're starting to unpric uh uh where we're starting to unpric uh future cuts, but it's uh you know low enough to where it's you know technically a miss and uh maybe it
[01:02] signals hey you know maybe we can actually increase some uh odds of a rate cut. Now my guess is we probably won't get a January 28th rate cut. Uh so the uh ADP job numbers, we'll get the actual report here in just a moment. Uh they
[01:16] haven't updated their website uh just yet. Remember that last report was 32,000. Uh so coming in uh hot now at well I shouldn't say hot. The estimate was 50,000 but coming in at 40,000
[01:31] decent. Uh initial reaction in markets is basically nothing. This is at least pre-market. Nobody really cares right now. We still have a lot of catalysts coming up over the next uh few days here. Uh specifically, we're going to be
[01:45] uh looking for jolts. We're going to be looking for uh some survey data. Let me give you the exact times and numbers to look for. Uh and these will really shape uh the week of catalysts. So, we've got um S&P services that came out yesterday.
[02:02] We already saw those. We got the ADP numbers that just came out. forecast did get revised up from 48,000 to 50,000. Again, we got 41,000. ISM services uh come out today at 7 a.m. The Jolt survey comes out today at 700
[02:17] a.m. Uh and then we'll get Challenger job cuts on the uh 8th, so tomorrow at 4:30 a.m. And then Friday morning, we'll actually get the Bureau of Labor
[02:29] actually get the Bureau of Labor Statistics job report. Uh now right now ADP waiting for those details to post to their website. Uh not out just yet, but
[02:41] once they get some of those details on uh that 41,000, we'll get a little bit of uh insight and color into uh what the makeup is uh of those numbers. I think a lot of folks are wondering, hey, like you know, small
[02:55] businesses versus large businesses. Is this mostly just uh a large business leftover hiring? And that's consistently what we have seen. Let's take a look at yields. So yields right here dropping a nice 4.1 basis points on that. That's a
[03:10] pretty nice drop on the 10-year. And if I look at the 2-year, the 2-year is only I look at the 2-year, the 2-year is only down 1.8 at least this early. Uh this now leading this this additional decline in the 10 versus the two actually
[03:25] yielding that leading that yield curve to converge a little bit which is actually kind of nice. you know, we've been sitting around 7172 and so now we're back down at 68. We're at that shockprone level of the yield
[03:38] curve. Uh unfortunately, as you start approaching 125, so 1.25, approaching 125, so 1.25, uh you let's see here. Yeah. Okay. Uh you start getting uh into that sort of recessionary zone. Uh anything over 50
[03:54] is really shockprone where a shock can kind of push you into recession uh pretty easily. And then anything over 1.25 is historically when we've been in a recession. So we're kind of on our way there with this increase over here. This
[04:09] ADP report this morning softens that a little bit. Uh and so let's see here. We are looking for Okay, let's see what else we have. So then, uh, Friday, the
[04:21] else we have. So then, uh, Friday, the estimates currently for Friday's jobs report, just so you have that handy, are Friday, Friday, Friday, Bureau of Labor Statistics, that number is going to be
[04:34] 66,000. So kind of in a similar spot. Not that So kind of in a similar spot. Not that ADP is usually massively predictive uh on uh what we're going to end up getting for the US jobs report, but it is a
[04:46] little bit of a gut check, which we do like that because, you know, frankly, little rigged over at the government right now. There we go. 41,000 now up on their website. December brought a rebound in hiring. That's actually quite
[05:01] bullish. That's kind of what we want to stick a soft landing. Now, we don't know if it'll last, uh, but if it does, it's really good. This is the definition of how to get to a soft landing is you rebound that soft patch of jobs, and
[05:17] after you get that rebound, we actually get back to cooking. Uh, and so this is actually great. I like to see that. Uh, but in fairness, they were comparing to -31,000 yesterday. So, 41,000 pretty pretty
[05:29] good. Uh, all right, let's see here. uh led by education and health services, leisure, hospitality, small establish There we go. Remember how I mentioned just large businesses or what about those smalls? You know, we didn't have
[05:44] the actual document yet. And look, that's literally the headline that they chose. The headline they chose, small establishments were covered from job establishments were covered from job losses with positive year end hiring.
[05:58] But unfortunately that came as even large employers pulled back. So now of course the question is how much of it uh you know is seasonal related to seasonal adjustments. We'll go look at some of their details here in just a moment. But
[06:11] looking at differences in sizes you can actually see pretty balanced midsized really added the most over here. Small added more than large in this case. We keep seeing that in the manufacturing surveys too.
[06:26] The manufacturing surveys are pretty darn clear that, you know, manufacturing's in uh in an unfortunate slowdown. We've seen this in both of the uh uh reports uh over the last couple days, whether ISM or the S&P numbers.
[06:39] Manufacturing seems to be in this 20month slowdown. It just seems to be getting worse. So, uh then we've got professional business services minus 29K, education, healthcare still up 3 uh 9,000. Wow. Leisure, hospitality 24K.
[06:53] Let's get into some of the details of the actual report. Let's see where that pay is going as well. Now, something to remember before we look at it, when it comes to pay, usually pay is not only a way to see inflation, but also see um
[07:07] way to see inflation, but also see um competitiveness for jobs. So, uh if pay is suddenly revising up, maybe it's becoming more competitive to get workers and there's just a shortage of workers rather than a plethora of workers. I
[07:21] mean, as is true with any kind of supply uh shortage. So, uh throw this into the uh shortage. So, uh throw this into the PDF editor. Let's see what we got. So, people who stayed at their jobs, year-over-year pay was unchanged, so
[07:34] balanced at 44. And uh if you change jobs, you actually saw an acceleration from 6.3 to 6.6% in uh a change in your pay. So, uh
[07:47] in uh a change in your pay. So, uh pretty good actually. Not bad. Uh okay, very good. So I like to see that. That's uh you know pay pay increasing or uh uh uh you know pay pay increasing or uh uh an adjustment up is great for uh for job
[08:02] changers. Uh that's positive uh positive uh labor Uh that's positive uh positive uh labor market demand, right? If if demand uh market demand, right? If if demand uh were falling off a cliff, you'd see uh a
[08:17] lower willingness for companies to pay more. Now, in fairness, when people change their jobs, they might just be anchored into, you know, old wages and hence why it seems like their job uh gives them more of a boost. But you did
[08:32] see that inflection up uh from 6.3 to 6.6. So that delta is is uh you know 6.6. So that delta is is uh you know going in a good direction. All right. So uh and you can see the pay at small firms actually increased the lowest
[08:46] amount only 2.3% relative to medium employers at 3.9 and large employers giving the largest pay bumps over here of about 4.8%. All bumps over here of about 4.8%. All right.
[09:03] Ah and look at this revisions over here. So the negative 32,000 was revised up by So the negative 32,000 was revised up by 3,000. Not a big revision, but uh you know directionally bullish, small revision up, you know, we'll take it.
[09:15] We'll take it. If we could have a nice calm week this week with with the data catalyst, it would be great. You know, so far this is this is not bad. See what else we have here. Independent measure of the labor market, blah blah blah. All
[09:28] right, great. So December run rebound and hiring. That's the same thing they said earlier. Uh and again the sectors that lost, we saw this on their little pretty charts on the other page. Professional business
[09:41] services and information. Uh as well as manufacturing. So three sectors here that really lost big gainers here, education and healthcare as well as leisure and hospitality. Now obviously this one really deemed to be late cycle.
[09:57] Uh and then uh then [clears throat] we've got uh leisure and hospitality which which often is ob obviously associated with enthusiasm. Uh now uh especially with consumers like one of the things that we
[10:10] saw on the uh ICE or the S&P report yesterday was that goods purchases were actually doing really well. Uh I'll pull that up really quick. Take a look at this chart right here. Consumer goods top US sector growth rankings in
[10:27] December. Consumer goods was the best performing area of the private sector economy at the end of 2025. Well, that's really good because when you're seeing consumer goods move, uh that means people are confident at least
[10:40] to some extent that layoffs aren't imminent for them, which is great. Again, obviously, you've got this slowdown that we saw yesterday in S&P US services uh for business activity weakening, employment down uh slightly
[10:55] as outlooks soften. The problem is with this employee or this uh ADP jobs report is we are starting to see this flow of lower orders, new business inflows rising to the weakest degree over a year and a half. Growth activity faltered and
[11:10] was the slowest since April. outflows of new business rose only marginally, weakest degree in 20 months. You know, uh this this is usually how you begin a uh this this is usually how you begin a layoff cycle. Uh which isn't great
[11:24] because what you're really saying is, hey, uh in manufacturing at least, we're seeing orders really slow down. And even though unemployment barely moved in manufacturing, it's going to come if these new orders stay uh bad like this.
[11:40] Uh now then again the other sectors were moving right so maybe it's not that big of a deal. Uh but seeing that leisure and hospitality hiring it's decent especially since the numbers are uh seasonally adjusted. So if you go into
[11:55] here for example this leisure and hospitality uh figure this is going to be seasonally adjusted which is really important on the holiday season right seasonally adjusted. Uh very important because what you really want is you want
[12:10] you want the delta uh for this specific time of the year, right? So you're comparing year-over-year overear what kind of
[12:22] additional jobs did we hire relative to what we typically do. So this is what we typically do. So this is actually good. Uh and I'd say there's report. This is good. Uh we don't know
[12:34] what we're going to get on the official jobs report on Friday. They can sometimes vary substantially. Uh the official jobs report on Friday, the estimate is 66,000. If we get something over a 100,000, we're probably going to
[12:47] start seeing rate cuts reduced. Uh but confirming a rebound over there, similarly to here, without major revisions uh that trigger the SAM rule or a big increase in the labor force participation rate would be good. the
[13:00] skyrockets though, the unemployment rate is going to skyrocket too and it's going to suck. So, uh, interestingly, you could create a lot of jobs, but participation goes up, the unemployment rate will skyrocket. That can sometimes
[13:14] make markets nervous. Uh, okay, good. So, now let's just take a look at those stabilization we're getting. Looks like we're stabilizing around 68 on the 102 we're stabilizing around 68 on the 102 curve. Uh the 10-year is still down 47.
[13:30] 2-year is still down two. So that's why we got about that three basis point move there from about 71 on the 102 down to 68. Uh and then looking for any kind of movement in the pre-market. Really not not much. Getting a little bit of a tick
[13:45] up, but very little reaction function in markets at least right now. Uh but that's okay. You know, I I usually don't like using pre-market for predicting how the day is going to go, but uh you know, broadly, these these numbers weren't
[13:57] bad. So, I'm optimistic about this. Take a quick look to see what the suits are a quick look to see what the suits are saying about it. Uh suits, no yields decline as ADP uh comes in slightly low.
[14:12] And let's see here. We've got US companies. Okay, here we go. Hiring rose at a moderate pace. Private sector increased 41K. Economists were calling 50K. Small businesses recovered. The
[14:25] report adds evidence to a gradual cooling, not a rapid deteriorating labor market deteriorating. Yeah, I totally agree with that. Hiring has been tepid which is weighing down not only economist forecasts heading into the new
[14:38] the employment of their employment prospects. Yeah, but you know, broadly this is good. If we could hold this week and get through this week of catalyst with good data like this, that's bullish and I like to say it, you know, it's my
[14:53] Yeah, >> bullish catalyst. >> Yeah, we love it. So, uh hopefully this keeps going. Hopefully that rebound keeps on keeping on. Uh and then of course uh you know once we get through
[15:06] this jobs week we'll have uh my birthday coming up which is uh when we'll have Fed day and we're not expecting a rate cut for Fed day unfortunately. Uh we are expecting a chance I think it was like 14% when I last looked. We are at 16.1%.
[15:22] So we have a 16.1% in chance in the futures market here of actually getting that 25 basis point cut. uh which means we're sitting at roughly an 84% chance that we are not going to get a cut. Uh so uh so very
[15:37] going to get a cut. Uh so uh so very good uh very excited about this and uh you know hopefully we could keep kicking butt here. So with that said, thanks for uh being here. We'll uh we'll be heading on over to the Meet Kevin Alpha live
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[16:31] moment. So, with that said, thanks for being