Recapping the day's news and newsmakers through the lens of CNBC.
Jobless Numbers OK, but Wait 'Til Friday
New unemployment claims fell last week pointing to job growth amid a slowing economy.
Initial claims for state jobless benefits came in at 346,000, down 11,000 from the previous week, according to the Labor Department. Claims usually fall on the Memorial Day holiday week, so while the numbers aren't bad, they also aren't anything to get excited about.
Unemployment is holding steady at about 7.5 percent, its lowest point in 4½ years, but still too high for comfort. So while it's good news that private employers are creating new jobs at a steady pace, it's bad news that it's a painfully slow pace.
Friday's big jobs report should serve as a bellwether for the economy and also provide a clue as to when the Federal Reserve might begin tapering its bond buying program. Speculation has the number coming in at a relatively neutral 160,000, which is what investors want.
"Overall, the indicators have been weak, and that includes thinking about the challenge you have with the ISM manufacturing and service number—both suggest expansion but that has decelerated. I think people forget one thing, which is that economic growth is weaker in this quarter than it was in the prior quarter. We're talking about 1.5 versus 2.5 percent. The Fed, you could say, is neutral to the extent that it is doing the same QE that it did last month. But the Fed would argue that every time that it adds to its balance sheet and takes duration off the market it's more stimulus."—CNBC's Steve Liesman
"I think they probably want to see a bit of a neutral number in the context of160 or 180. If the headline number is good, what is the average workweek? There is a concern that people are being taken off full-time employment and put on temporary employment because of the health care act coming up."—Art Cashin, UBS director of NYSE floor operations
The Buck Stops Here
The love affair between the stock market and dollar appears to be heading for the rocks.
The two have moved in tandem, breaking a pattern that had been prevalent since the Federal Reserve began its aggressive easing measures that helped keep the U.S. currency weak against its global trading partners and equity markets strong.
But with expectations dimming that the Fed is planning an early exit, the dollar likely will lose some of its momentum as the central bank maintains its low interest rate posture and quantitative easing program.
Thursday saw the dollar collapse versus the yen by a whopping 3 percent. The reason is jitters before Friday's jobs report.
"We're seeing a massive positional unwind. The market, in general, has seen a nice rally in the dollar since [Fed Chairman Ben] Bernanke spoke to Congress and the market had been expecting tapering of quantitative easing. But suddenly, the market said, 'What if the number tomorrow is around 150,000 and it gives reason to pause?' That's caused a huge positional unwind and it's exacerbated by massive illiquidity in currency markets."—Paul Richards, head of FX distribution-Americas, UBS