Independent Strategy
Independent Strategy: Nick Kennedy

Nick Kennedy, Chief Economist

NICK KENNEDY, Chief Economist, joined Independent Strategy in December 2012. He bears primary responsibility for all aspects of Independent Strategy’s investment research process, with a focus on macroeconomics and financial market strategy. He holds an honours degree in Politics and Modern History from Manchester University and holds the MSTA designation from the Society of Technical Analysts.

Posts by Nick Kennedy

US

POST » 3rd April, 2020 » US March Non-Farm Payrolls

Bleak payrolls report.  While the median survey was always going to be a short in the dark, the -701k decline in jobs was significantly more troubling than the mkts -100k guess.  That’s the worst number since March 2009, a period of losses that saw five consecutive payrolls figures below the -700k mark starting from November 2008.  Looking at the past fortnights jobless claims figures the April number and revisions to this release will paint an even bleaker picture of the labour market.  In the household survey nearly 2.987mn jobs were recorded lost.

ADP reported fewer than expected job losses for March, with a modest -24k drop (mkt -150k), which compares to the 3.3mn jump in initial jobless claims last week.  Partly this is due to the survey dates (it tallies responses up to the 12th of the month).  So we will see catch up next month.  Prior month was revised down to 179k from 183k.

The rapid and devastating effect of Covid-19 on the labour market is unprecedented based on this week’s jobless claims.  Initial claims in week ending came in at 3,283k which looks like a data error rather than an actual real data point.  But real it is, and further increases look likely in the coming weeks as the economic stop continues to push people out of employment.

Trying to look beyond to what the day after looks like is important, particularly at a political level.  Will it be a blow or a boost to the populists? In the US, France and Germany it looks like it will be a reminder to voters of the damage populists can do.  There is a broad feeling that serious government is required.

US household income growth looked pretty solid with a 0.6% m/m gain during January, which tends seasonally, to be a weaker month.  That lifts the y/y rate back to a shade under 4.0%, although the near-term trend remains one of moderation.  On the spending side the increase surprised on the downside at +0.2% m/m and that pulled y/y growth back to 4.5%

Global

POST » 25th February, 2020 » Corporate earnings health check

In recent years equity markets have been driven more by central bank largesse than by corporate profit performance. With bond yields close to record lows — in both real and nominal terms — investors have charged into higher-yielding risk assets with gusto. Still it behoves us to keep an eye on the underlying earnings picture.

Germany

POST » 14th February, 2020 » , AKK KO

Well, that didn’t take long. After last week’s debacle in Thuringia (see our report Thuringian tremors 7 February 2020) CDU leader Annegret Kramp-Karrenbauer (AKK) found her authority fatally undermined and announced that she would soon step down to allow a new leader to be elected in the summer.  This leader, she said, should also become the party’s chancellor candidate for the next federal election, scheduled for autumn 2021.

US

POST » 13th February, 2020 » US January CPI

CPI recorded a modest rise in January, headline up to 2.5% yoy from 2.3%, a shade above mkt estimates.  Core flat at 2.3% yoy which was a touch above consensus too, but really not much more than rounding.  Overall the inflation picture still looks fairly settled.

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In the Media