Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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January 3, 2023

Is US recession inevitable?

Macro & Overnight

Bloomberg surveyed 500 year-ahead outlook pieces from brokers, banks and asset managers and declared 2023 the most widely anticipated recession in history. Given how badly market participants anticipated the events of 2022, how should we think about this?

One potentially false assumption markets are making about 2023 is that the US will go into recession. We get US jobs data on Friday to evidence this hypothesis.

Having travelled in the US over the holiday, there is little anecdotal evidence of a slowdown. Another strong non-farm payroll number is likely to be taken negatively by market participants waiting for the Fed rate pivot but also help vindicate Jay Powell’s hope for a soft landing.

Elsewhere oil and gold prices have firmed, and the value of the US$ remains weaker.

UK Company News

Chocolatier Hotel Chocolat has announced a new strategic partnership with Tokyo-based Eat Creator Corporation. Hotel Chocolat will hold 20% equity in a newly established JV covering the 21 branded Hotel Chocolat stores and supported by a customer database of 200,000 registered Japanese consumers. This move represents a partial recovery from the previously announced withdrawal by Hotel Chocolat from the Japanese market.

Victorian Plumbing announced a new DC, in line with its stated plans.

 

Prognosticator

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