The economy might be just fine after all
Welcome back! Do you know where your friends are? No seriously. Do you? If you're part of Gen Z, there's a good chance you're tracking their locations with the Find My Friends app. The rest of us … not so much.
In today's newsletter, the case for the economy heading in the right direction is growing.
What's on deck
Markets: Three big things Citadel interns will learn during their first week on the job.
Business: Online communities for helping people who were laid off are gaining steam.
But first, don't sweat it.
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The big story
Economic optimismIt turns out the economy might be fine after all.
After plenty of handwringing about what the future might hold, the hard data indicates an economy that's in decent shape.
The latest good news was May's better-than-expected jobs report. The 139,000 jobs added were more than the 126,000 economists had expected.
I don't mean to be too optimistic — when I mentioned this newsletter topic to my boss, they responded earnestly, "IS IT?" — but investors are also feeling a lot better about things.
The Leuthold Group wrote in a recent note that the market believes the US economy will keep growing and is trading like there's "no recession risk whatsoever," writes BI's Christine Ji.
The focal point of the investment firm's argument is the S&P 500 Cyclical/Defensive Ratio, which compares economically sensitive sectors to consumer staples. The higher the number, the more bullish investors are about the economy's prospects.
Last month, the ratio hit an all-time high of 1.19, meaning cyclical stocks have a 19% edge over defensive ones. Translation: Investors aren't sweating a downturn.
REUTERS/Lucas Jackson
That's not to say we're totally in the clear.
(You didn't think it would be all sunshine and rainbows, did you?)
Bank of America, for one, recently warned of two big sell signals in stocks that are close to flashing, writes BI's William Edwards.
One is the amount of money flowing into global stock funds: nearly 1% of their current assets under management within a four-week span. The other is that the vast majority of countries' indexes (84%) are trading higher than their moving targets. Both signals suggest investors could be getting too bullish for their own good.
But BofA's warning is like a lot of the concerns about the economy and market going around these days: things that could happen.
That's not to say those worries aren't valid. The uncertainty around tariffs remains a real question mark. And if the US posts a second-straight quarter of GDP contraction, it will be in a technical recession. Still, those issues haven't necessarily materialized in the economic data. Outside of last week's weaker-than-expected ADP jobs data, things are looking good. And Wednesday will be another chance to review the hard data with the monthly inflation report.
3 things in markets
1. Broke: Dr. Doom. Bespoke: Dr. Boom. Nouriel Roubini has been known as Wall Street's "Dr. Doom" for 17 years, but lately he's sounding pretty positive. Roubini has scaled back his recession call and thinks the US is headed for an investment boom — and he told BI why.
2. How to stand out in your Citadel internship. Head of campus recruiting Matt Mitro told BI the three keys to success that interns at Ken Griffin's hedge fund (and its market-making sister firm, Citadel Securities) learn in the first week.
3. Can JPMorgan be unionized? Dissatisfied staffers certainly hope so; they're organizing largely in response to the bank's RTO mandates. If a similar effort over at Wells Fargo is any indication, however, workers at Jamie Dimon's company have a long road ahead.
3 things in tech
1. Exclusive: Amazon freezes retail hiring budget for this year. The company said it will keep a "flat headcount opex," or operating expenses, according to a copy of an internal email obtained by BI. The company is still hiring, but holding the budget steady could encourage managers to get smarter with compensation expenses, BI's Eugene Kim reports.
2. Nvidia's challengers rise. Nvidia's costly and power-hungry chips are prompting competitors to seek more efficient solutions. Many of them are carving out a niche with chips for specific tasks, and industries, from high-frequency trading to sovereign AI, are already turning away from Nvidia.
3. Apple's big day may get awkward. The company's annual Worldwide Developers Conference is known for its flashy product announcements, drawing fanatics and investors to its headquarters. But this year, there will be some elephants in the room. BI's Peter Kafka broke down Tim Cook's problem.
3 things in business
1. A less colorful corporate Pride Month. Some companies are toning down their LGBTQ+ support amid cultural and political pressures. Regardless of how companies proceed, though, nobody seems happy.
2. Baker Tilly 🤝Moss Adams. As PE reshapes accounting, these former rivals are joining forces, merging to create the sixth-largest advisory CPA firm in the US. BI spoke with the CEOs about why they struck a deal.
3. Laid off? There's a support group for that. It's clear layoffs don't just impact "bad" employees. Now, online communities are helping remove the stigma and get people back on their feet. From Substack to Reddit, here's how the jobless are rallying.
In other news
Ai Weiwei made a piece of art out of plastic bricks that cost $280,000. I did it for $250.
Brookfield Properties lays off executives as it continues evolution from CRE giant to asset manager.
VC's new favorite guessing game: Who is Arfur Rock, the 'Gossip Girl of Silicon Valley?'
The latest TikTok trend: Saying your parent is a big-time business exec.
The Trump-Musk feud is painfully awkward for the GOP.
AI search tools might be as good as they ever will be, one AI founder says.
YouTube is testing a new feature to help videos travel around the world.
Diabetes startup Omada Health finally went public after 14 years. Here's who made bank.
A Big Four consulting giant tries to make accounting less boring with AI.
DeepWho? DeepSeek rolled out even more powerful, cheap AI tech. If you missed it, you're not alone.
What's happening today
Apple Annual Worldwide Developers Conference opens with keynote by CEO Tim Cook.
New US travel ban affecting 19 countries goes into effect.
It's Bill & Ted Day. Be excellent and party on, dudes.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York (on parental leave). Hallam Bullock, senior editor, in London. Grace Lett, editor, in Chicago. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Lina Batarags, bureau chief, in Singapore. Ella Hopkins, associate editor, in London. Elizabeth Casolo, fellow, in Chicago.
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