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