More US job losses, investors pull back

US job losses appear to be rising. From Bloomberg:

Companies in the U.S. eliminated an estimated 693,000 jobs in December, the most since records began in 2001, a private report based on payroll data showed.

The drop in the ADP Employer Services gauge was larger than the median estimate of economists surveyed by Bloomberg News. Today’s report is the first to reflect methodological changes that ADP says will narrow the differences between its calculations and the government’s payroll numbers.

The ADP report, together with poor reports from companies, finally ended the strong run in stocks, the S&P 500 falling 3 percent on Wednesday.

Crude oil also fell sharply, not helped by a bigger-than-expected inventory last week reported by the Energy Department.

With the global economy sinking, policy makers are in rescue mode. Taiwan and Indonesia cut interest rates on Wednesday.

But while monetary policy has been pushing rates down, fiscal policy is making investors think twice about buying government securities. Bloomberg reports Wednesday's action in Treasury markets.

Treasuries fell as a record $30 billion auction of three-year notes added to concern debt sales will swell to unprecedented levels amid efforts by the U.S. to spur economic growth with spending increases and tax cuts.

Government debt has dropped 1.35 percent since December, the worst start of a year in at least two decades, according to Merrill Lynch & Co.’s U.S. Treasury Master Index. The U.S. budget deficit will more than double this year to $1.2 trillion, a Congressional Budget Office report said...

Yields on benchmark 10-year notes rose three basis points, or 0.03 percentage point, to 2.49 percent at 4:45 p.m. in New York, according to BGCantor Market Data. The 3.75 percent security maturing in November 2018 fell 10/32, or $3.13 per $1,000 face amount, to 110 30/32. The yield has climbed 46 basis points since hitting a record low of 2.035 percent on Dec. 18.

Two-year note yields increased three basis points to 0.81 percent. Thirty-year bond yields added three basis points to 3.04 percent.

The same concerns apply in Europe, where Germany’s sale of 10-year bunds on Wednesday lured the least demand in six months and the yield on the 10-year bund rose four basis points to 3.19 percent even as German unemployment rose for the first time in almost three years in December and eurozone producer prices fell the most in 27 years in November.