Market Analytics and Technical Considerations
Key Points and Views
Last month, recruitment exceeded projections and wage growth increased more quickly than anticipated, shattering expectations that had been building on Wall Street in recent weeks. S&P 500 futures fell, the dollar strengthened, and Treasury rates increased sharply.
It seems like it ought to be a negative sign for the markets. The main result was good and it is obvious that wage pressures are still present, but the internal parts and following aspects were not very strong. That implies that the Fed can’t actually loosen up excessively, although growth keeps declining.
A little unexpected came with the job addition. a little surprising given how many tech layoffs and wage freezes have been publicly announced. Naturally, this implies the Fed can continue to give inflation its entire attention.
Undoubtedly a good job report. That is roughly what we had anticipated. Nevertheless, we think that the 17% reduction in the money supply is to blame for the strong currency, rising mortgage rates, and falling commodity prices. Despite the robust labor market, we anticipate a sharp decrease in inflation as 5% of energy costs are transferred to core prices. For instance, oil prices have a significant impact on airline ticket pricing.
Mike Bailey, FBB the company’s director of research – Capital Partners
This study couldn’t have come at a worse moment. Following Powell’s comments on Wednesday that we had a positive flight path to the year’s conclusion, markets started to feel more secure. The hot jobs statistic for today, though, bursts that balloon. To be fair, we believe that the following inflation (CPI) data point that follows the Fed’s rate decision will receive considerably more scrutiny from both markets and the Fed.
The main story is profits! Last month had an increase of 0.5% rather than the anticipated 0.4%, and this month saw an enormous increase of 0.6%. Fed won’t appreciate that.
Strong, in contrast with everything else we have witnessed on the employment side, and at war with itself. Everyone questioned if poor economic growth would be detrimental to future market performance; this is unimportant today. This was overly forceful and detrimental to risky investments. This, in our opinion, makes little difference in the prospects for growth in the economy. It is obviously slowing down and will keep doing so. We run the possibility of experiencing more S&P 500 falls and adverse financial conditions, which would guarantee a slowdown.
