Recapping the day's news and newsmakers through the lens of CNBC.
Bad Data … Bad News?
Wednesday data on productivity and jobs were inconclusive. Sure, the economy gained 135,000 jobs, but that was fewer than expected. And nonfarm productivity was up just 0.5 percent in May (down from 0.7 percent in April), which is a gain, but a little on the light side. Labor costs, surprisingly, were down 4.3 percent.
According to ADP, the economy added 42,000 jobs in professional/business services, 31,000 jobs in the trades, transportation and utilities, 7,000 jobs in financial activities and 5,000 construction jobs, but lost 6,000 manufacturing jobs.
The Wednesday afternoon release of the Fed's Beige Book said that the economy grew at a modest to moderate pace. It did, however, mention that we are finally feeling downward pressure from the sequester.
The market suffered its biggest two-day loss since April. Bad economic news meant bad news for stocks, and there could be more of that correlation coming.
"Japanese markets in totality will give us probably our best barometer on global leverage in the financial asset community, better than anything else, because it's hard to get signals with these programs like quantitative easing."—CNBC's Rick Santelli
"I think the market is acting as it should, which is to say we've had some punkish economic data of recent, clearly […] disappointing. The ADP number setting up perhaps for a jobs report Friday that is less than the market is expecting. In addition to that, we have the manufacturing numbers from the ISM that were just below the boom/bust line. And today's number from the ISM services index [showed] that the employment component was just barely above the boom/bust line, in fact at a 10-month low. We're in the period that we're not getting economic validation to support higher equity prices."—Mark Luschini, Janney Montgomery Scott
Rising Rates, Housing and the Economy
What happens to the housing recovery and the economy when interest rates continue to rise? As you'd guess, the effects will be manifold.
Banks like Wells Fargo, Bank of America, JPMorgan Chase and Citigroup, which have enjoyed a huge influx of refinancing money, will see a big chunk of it disappear as rates rise above 4 percent. New-home prices, which had seen a big surge, could suffer as potential buyers recoil, reducing the profitability of home builders.
Those same home builders are seeing the cost of land and labor go up while materials fluctuate, which might be a good sign for the economy but isn't good for their bottom line. Oh, and don't forget that those same home builders will see rising financing costs.
And then factor in a big backlog in sales because of a slower and more restrictive mortgage-approval process, said Stuart Miller, president and CEO of Lennar, and you have added pressure. All of this could point toward normalcy … or downward pressure on sales and profitability.
"You are clearly seeing a knee-jerk reaction to what I think is more of a reversion to kind of a normal line of where things should be. So, you know, interest rates have been at historic lows. They're going to revert to some normal trend and the first reaction certainly from the investor community is going to be that question of how high could interest rate go before it starts to affect a housing market and likewise you see the reversion to normal in pricing and the buying public and the investor community as well starts questioning 'are we starting to see another bubble in housing prices?'"—Stuart Miller
Samsung Strikes Back
Score one for Samsung Electronics in its ongoing legal battle with Apple. The International Trade Commission late Tuesday issued a ban on imports of older models of the iPhone sold by AT&T and a variant of the iPad because Apple violated a Samsung patent related to 3G wireless technology and interoperability.
All such exclusion orders are sent to the president, who has 60 days to veto them or let them pass.
Apple said it would appeal but industry watchers say the impact to Apple will be negligible anyway, as the two companies continue to pursue patent battles against each other in multiple countries.
"When Apple does release a new phone in the fall, the four will most likely be discontinued. They could introduce a brand new phone, as well, which would completely make up for something that would affect this. I don't think this is that big."—Jonathan Geller, Boy Genius Report
"The essence of this is that this has about a 1 percent negative impact on Apple's revenue over the next couple of quarters if the injunction holds. Beyond the September quarter it doesn't have any impact because the last product would be the iPhone 4 and that's going to be retired."— Gene Munster, senior research analyst, Piper Jaffray
"There are a lot of folks who can spell Hadoop and put it on their résumé and call themselves data scientists, and nothing can be further from the truth. We need, as an industry, to get that term defined."
Government Motors No More?
The Treasury Department announced Wednesday that it will wind down its stake in General Motors with a sale of 30 million shares in conjunction with the automaker rejoining the S&P 500 after the markets close Wednesday. It will coincide with the sale of 20 million shares held by a United Auto Workers medical trust fund and could lead to further capital actions, including a dividend.
So far, the government has recovered about $30.5 billion of the $50 billion it has invested in GM. The company's IPO shares were priced at $38; they will sell Thursday at $34.50 after dipping into the teens last summer.
"It does seem to be on track to book a loss, the $50 billion it put out versus the $30 billion recovered so far. Maybe it has another $9 billion or $10 billion total of stock but it looks on track to lose about $10 billion. However, the government has maintained all along its job was not to make money on this investment."—CNBC's Steve Liesman
21st Century's Sexiest Job
With more and more companies using big data, the demand for data analytic specialists—sometimes called data scientists, who know how to manage the tsunami of information, spot patterns within it and draw conclusions and insights—is nearing a frenzy.
The latent pool is roughly 20 percent demand and salaries start at $125,000 for right-out-of-school qualified applicants. Companies fear, though, that the better trained workers are for more specific big data tasks, the greater the risk becomes of the worker jumping ship for a higher-paying opportunity.
"People are slapping buzzwords on résumés and looking to get 50 or 100 percent more, and they're getting it. There are a lot of folks who can spell Hadoop and put it on their résumé and call themselves data scientists, and nothing can be further from the truth. We need, as an industry, to get that term defined."—Scott Gnau, president, Teradata Data Lab
_ By Doug Cubberley, Special to CNBC.com