Provides a market roundup, a selection of useful data points we use for our investment analysis, and some interesting articles/charts we have noticed recently.
The major U.S. equity indexes ended last week higher, buoyed by the possibility that the Federal Reserve may slow the pace of its interest rate increases. Growth stocks outperformed their value counterparts in the S&P 500 Index, while the technology-heavy Nasdaq Composite Index posted solid gains. The “traditional economy” Dow Jones Industrial Average (DJIA), however, took a bit of a breather and ended modestly higher. Still, the DJIA did enter bull market territory on the final day of November, when it closed more than 20% above the low it hit in September 2022.
Quite amazing considering the global macro-outlook, the jobs market was an area of focus for investors, with Powell telling the audience at the Brookings Institution that labor demand would likely need to soften as the central bank seeks to bring inflation under control.
Data from the Bureau of Labor Statistics showed that the number of job openings declined by about 353,000 to 10.3 million—a level that was slightly below a consensus estimate for 10.4 million available positions.
Nonfarm payrolls data showed that the U.S. economy added 263,000 jobs in November, exceeding a consensus estimate that had called for the pace to slow to about 200,000. The report called out job gains in leisure and hospitality, health care, and government as well as employment declines in retail, transportation, and warehousing. The unemployment rate remained at 3.7%.
In Australia, soaring iron ore, coal and natural gas prices are set to add $58 billion to tax revenue over four years and deliver Treasurer Jim Chalmers a Christmas miracle – a federal budget bottom-line temporarily in balance. But while a boon for exporters, high commodity prices are driving domestic inflation, placing huge strain on household budgets, and forcing a major intervention in the energy market by the Albanese government.
Eyes are also on the RBA and an expected eighth straight interest rate rise at the Reserve Bank’s final board meeting of 2022.
Economists pencilled a quarter-point rise in the cash rate on Tuesday, taking it from 0.1 per cent to 3.1 per cent in just seven months – but investors think the odds of a temporary pause are increasing.
Time will tell who is correct.
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