Full-time employment DROPPED by 1 million workers in August on a year-over year basis, marking the 7th consecutive monthly decline.
Since the June 2023 peak, full-time job count in the US has fallen by a whopping 1.5 million. Meanwhile, part-time employment rose by 1 million year-over-year in August. Additionally, the number of permanent job losers jumped by 324,000 year-over-year, to 2.5 million, the highest since November 2021. This was the 16th straight month of part-time job gains, the longest streak since the 2008 Financial Crisis. The US job market is cooling down. Source: FRED, The Kobeissi Letter
Ahead of ECB meeting, we got some mixed messages about the central bank speed and extent of rates cuts - see below.
Meanwhile, the market see quarterly ECB rate cuts - see chart below. - European Central Bank (ECB) Governing Council member Gediminas Simkus told Econostream Media that he saw a “clear case” for an interest rate cut in September but regarded the potential for another one in October was “quite unlikely.” - Executive Board member Piero Cipollone told France’s Le Monde newspaper that recent economic data so far had confirmed that inflation was slowing, giving scope for the ECB to lower borrowing costs. “There is a real risk that our stance could become too restrictive and harm the economy”. - However, Bundesbank’s Joachim Nagel continued to warn about premature easing, given elevated wage growth and services inflation, in an interview with the Faz newspaper. Source: Bloomberg, T Rowe
AstraZeneca Under Pressure but Entering Support Zone
AstraZeneca's long-term trend remains positive, though it is under pressure today and has dropped about 10% over the past week. The stock is now entering the major support zone between 11,540-12,050. Keep an eye on these levels. Source: Bloomberg
In our H2 outlook, we highlighted 5 key themes expected to unfold before year-end. As we approach the final quarter, most are materializing, albeit with some notable uncertainties:
- Global economic growth is normalizing, but recent macro data, particularly in the US and Europe, signal an increased recession risk. While a soft-landing remains the core scenario, the likelihood of a hard landing has grown since H2 began. - The US labor market is showing signs of slowing, with a looming risk of a sudden and significant increase in unemployment. - The Fed is anticipated to make cuts. The question on everyone's mind is whether we will see a substantial jumbo rate cut (50bps) initially. - While sector and style rotation is underway, the defensive lean is proving to be more pronounced than initially anticipated. - Volatility is on the rise, with some moderation thus far (aside from August 3rd). The big question is whether we will experience real market stress leading up to the elections.
Donald Trump Trump threatens to impose a 100% tariff on countries that conduct business in currency other than the USDollar, adding a new pillar to his tariff platform.
Trump, who has long embraced protectionist trade policies, said the dollar has been “under major siege” for 8yrs. China, India, Brazil, Russia, and South Africa discussed de-dollarization at a summit last year. By contrast, Trump has said he wants the dollar to remain the world’s reserve currency, a pledge he renewed at Saturday’s rally. While Dollar dominance has lessened in recent decades, the US currency still accounted for 59% of official FX reserves in Q1 2024, w/Euro 2nd at almost 20%. Source: Bloomberg, HolgerZ
The global bond rally has regained momentum due to econ concerns in the US and weak figures in the Eurozone.
Value of global bonds rose 0.3% this week to $69.29tn, almost a fresh ATH. Source: HolgerZ, Bloomberg
Importance of curiosity
Source: Vala Afshar
There are now 510k more Job Openings than Unemployment Persons in the US.
That's the smallest differential since April 2021, down from a peak of over 6 million in March 2022. The labor market is rapidly cooling... Source: Charlie Bilello, Y charts
