Financial Markets
August nonfarm payrolls expanded by 142 thousand workers, from a downwardly revised 89 thousand and below expectations of 165 thousand. Payroll growth fell to a four-year-low of 116 thousand on a 3-month moving average basis. Notably, pro-cyclical…
The July Employment Situation report had already cemented the case for a September rate cut and Chairman Powell’s Jackson Hole comments dispelled any remaining doubt about an imminent monetary easing cycle. All the labor market data released since then…
Many currencies have registered sizable gains against the US dollar over the last two months. Most notably, the yen has been one of the best G7 performers since the greenback began depreciating. It now trades at 143 against the US dollar, marking a 11% gain…
There has been a decoupling within the global semiconductor industry. Demand for AI and advanced chips has been booming. Yet, sales of legacy and non-AI semiconductors have failed to recover. Given their spectacular run-up, share prices of high-end and AI-chip producers might continue selling off even if their sales continue to grow rapidly.
Both leading PMI measures painted a sluggish picture of China’s economic conditions in August. The NBS composite PMI suggested that overall activity barely expanded (50.1) and that the manufacturing sector’s contraction unexpectedly accelerated (49.4 to…
The Q2 2024 earnings season is drawing to a close with 93% of S&P 500 companies having reported results as we go to press. Nearly 80% (60%) of companies have topped earnings (sales) expectations in Q2, according to Factset. Excluding Materials and Real Estate…
According to BCA Research’s GeoMacro Strategy service, there are two main pressure points that the US can utilize against China. First, the US consumer market is the largest in the world. Despite having diversified away from the US, it remains a very…
The ISM manufacturing PMI improved in August, from 46.8 to 47.2, but remained below expectations of 47.5 and extended a five-month contraction streak. Production declined at a faster pace (45.9 to 44.8) and both new orders and new export orders contracted…
The risk-on soft-landing narrative dominated investors’ psyche last month and pro-cyclical assets topped the August return ranking. Asian currencies led the pack by a wide margin, while the dollar was the largest laggard. Markets pricing in an upcoming Fed…