Obviously, the jobs report was a blockbuster.
And Donald Trump is now basically frontrunning the BLS and more importantly, allowing the market to frontrun the BLS:
Note the timestamp there.
Is that something that’s normal? Well, no.
If you don’t like Steve, just ask Princeton’s Alan Krueger, who told Bloomberg that he doesn’t even remember the last time a President did what Trump did on Friday morning.
“They’re treated like state secrets,” he said in an interview with Bloomberg Radio. “So it’s rather surprising.”
Yes, “rather surprising.” But you know, it’s Trump we’re talking about, so I’m not sure why anyone would be particularly surprised by anything he does.
Of course this is all kinds of egregious for all kinds of reasons, not the least of which is that, as alluded to above, he’s moving markets. Here’s Brian, 30 minutes after Trump’s tweet, noting that it seemed to have moved Treasurys and the dollar:
Here’s 10Y yields, annotated:
And here’s the dollar, annotated:
That is hilarious, but also disconcerting.
Even if you get past the whole “the President of the United States is essentially tweeting out the jobs report data more than an hour ahead of time” thing, the issue here is that Donald Trump is no fucking Fed whisperer (unless by that you mean he whispers into Jerome Powell’s ear about firing him if rate hikes tank stocks).
Remember how, earlier this year, he was vocally aghast when the above-consensus AHE number that accompanied the January jobs report ended up tipping one of the dominoes that helped catalyze the largest VIX spike in history just 72 hours later? Here’s that tweet for anyone who needs a refresher:
He tweeted that five days after the January jobs report hit (apparently that’s how long it took him to understand how and why nascent signs of wage growth were seen as a risk-off signal). You can read my full take on that tweet from February here, but the point is, he has no idea how to read these numbers.
Which means that if you’re a trader, you could have interpreted Friday morning’s tweet in any number of ways.
Obviously he was suggesting the headline number would beat, but what, if anything, was he suggesting about AHE? And if he was suggesting something about AHE, was he misreading it again? That is, was he tipping a beat because he still assumes, like he did in February, that’s “good” news for the stock market? Or did he learn something from that episode and has he now come to understand the concept of “Goldilocks”, where what you ideally want is a beat on the headline jobs number but a more modest AHE print? Or was he just randomly tweeting shit while subjecting an Egg McMuffin to his loose dentures? Who the fuck knows, right?
Algos key on sudden knee-jerks in markets and, as Goldman explained in a recent note, when they “think” they might not have the whole story, they’ll pull back, potentially creating liquidity vacuums. And that’s to say nothing of algos trading directly on Trump’s tweets.
Of course as hilariously absurd as all of this is, perhaps the funniest part of the whole thing is that he is now so excited about BLS data that he can’t even wait until it’s released to tweet about it.
This is the same BLS data that, according to him, was “fake” under Obama.