Yesterday's economic data didn't prompt much in the way of definitive market moves but it watered the seeds of doubt about the US economy that started to germinate after the big non-farm payrolls revisions.
JOLTS job openings fell and then later in the day the Beige Book was worrisome:
Most of the twelve Federal Reserve Districts reported little or no change in economic activity since the prior Beige Book period—the four Districts that differed reported modest growth. Across Districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices.
The Beige Book isn't the kind of thing that causes an immediate re-think -- like non-farm payrolls -- but anecdotal data tends to lead and when you combine that with McDonald's highlighting a struggling consumer and it's a bad mix.
In general, I don't think this market minds a soft economy because it will bring about rate cuts but an outright recession is a problem. As Fed Governor Waller highlighted yesterday: When the jobs market crumbles, it can crumble fast.
So far the economy looks like it's slowing and the market is ok with that, so long as it doesn't get ugly. There is a big Fed put available too -- 4 full points of potential rate cuts -- and that's a huge put.
