And now for the jobs data
Macro & Overnight
The following sums up how we have chosen to react to the Powell speech, “The market has understandably focused on the likely interest rate path of the US Federal Reserve rather than considering inflation’s impact on corporate earnings”. In other words, we haven’t seen the collateral damage yet.
Today’s US labour market data expectations are for an increase of 200k jobs. This result is lower than average for the last two years but above the 100k level that Powell has cited as consistent with US demographics. Any significant slowdown in payrolls or increase in the unemployment print should be taken positively and lead to weaker US$ and lower yields, prolonging the relief rally.
The US ISM manufacturing headline index slipped into contraction territory for the first time since May 2020.
Mid-cap outperformance in the UK was helped by surging Sterling, which hit its highest level vs the US dollar since early August. Not the headline news that the falling pound attracted.
UK November manufacturing PMI improved marginally to 46.5. However, this is hardly a positive at a 4th straight monthly contraction.
UK Company News
Asset manager Premier Miton reported stronger-than-expected equity inflows and a cautiously upbeat outlook. If this is representative of UK equity market inflows, then a definite positive.
HR consultancy Mind Gym reported H1 results in line with management’s expectations. The outlook for the full year remains unchanged, despite the impact of economic headwinds. The company continues to prioritise investment for growth in digital.
IoT investor Tern‘s portfolio company, Device Authority, announced a significant contract win.
Self-storage provider Safestore is extending its relationship with Carlyle Group with a new JV for development in Germany.
On This Day ...
… in 1942, the World’s first self-sustaining nuclear chain reaction occurred at the University of Chicago, overseen by Italian American physicist, Enrico Fermi. Fermi was awarded the Nobel Prize for Physics in 1938 and is considered the architect of the nuclear age. However, Fermi is probably best remembered for a casual conversation in the summer of 1950 with fellow physicists while walking to lunch. The men discussed recent UFO reports and the prospect of extraterrestrial life. Fermi blurted out, “But where is everybody?” – the first exposition of what is known as Fermi’s Paradox.
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