The bulls are out again this morning, but an ADP Private Payrolls that simply stinks has dampened the mood.  While economists were expecting the headline reading to come in at 185K, the actual reading was just 27K.  That was the weakest monthly print since March 2010 and the third weakest report relative to expectations since at least 2006.

Outside of the US, the World Bank lowered its global growth forecast down by 0.3 percentage points to 2.6% and said that risks to the global economy are firmly on the downside.  On a similar note, the IMF lowered its growth forecasts for China slightly just as the May Services PMI for that country came in lower than expected.  In Europe, Services PMI data was slightly better than expected coming in at a level of 52.9 compared to expectations of 52.5.  Even if the economic outlook is cloudy, investors have been encouraged by the belief that the Fed is ready to act if needed.  Whether the market and FOMC are both on the same page with regards to what “needed” means, though, is up for debate, but more data like this morning’s ADP report will likely move the FOMC closer to acting.

Please click the link below to read today’s Bespoke Morning Lineup for our take on what the rates markets are pricing, a recap of services sector PMIs, and just as important the latest data on Semiconductor sales.

As mentioned above, the ADP Private Payrolls report just came in weaker than expected, missing consensus expectations by over 150K.  Using our Economic Indicator Database, we found that this month’s report was the weakest relative to expectations since January 2009 and just the third time since 2006 that the report has missed expectations by more than 100K.

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