Independent Strategy

Posts by Nick Kennedy

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.

Tracking the strong ADP release on Wednesday, the January non-farm payrolls report also comfortably beat expectations.  Weather has helped a bit last couple of months, with seasonal disruptions lower than normal, but that doesn’t detract from the underlying strength of the labour market.

Germany

POST » 6th February, 2020 » Germany December Factory Orders

The expected bounce in German factory orders remains elusive with a further sharp (-2.1% m/m) decline recorded in December.  That leaves the y/y rate at a scary -8.6%, a new low and overall orders now 12.6% from their peak using the seasonally adjusted volume numbers.

Tags

ADP (6) Agriculturals (1) Asia crisis (1) Asset Allocation (1) Australia (2) Autos (1) Bank of Japan (1) BoJ (1) Bonds (6) Brazil (1) Brexit (5) Canada (1) Capital Goods (2) Central Bank (8) Challenger (1) China (18) Claims (1) Climate change (2) Commodities (1) Copper (1) Coronavirus (4) Corporate Bonds (1) Corporate Debt (2) Covid-19 (4) CPI (7) Credit (34) Current Account (1) Debt (2) Debt Crisis (4) Democracy (4) Demographics (9) Disruptive Technologies (4) Durable Goods (1) Earnings (1) ECB (9) Elections (2) Emerging Markets (4) Employment (8) Equities (1) Euro (3) Eurogroup (1) Europe (2) Eurozone (19) Exports (2) Factory Orders (6) Federal Reserve (7) Fixed Income (2) France (1) FX (2) GDP (11) Germany (15) Globalisation (8) Global Pandemic (2) Gold (2) HICP (1) Hong Kong (1) Housing (4) IFO (3) Income (1) India (1) Industrial Production (9) Inflation (22) Interest Rates (11) Investment (5) IP (9) Iran (4) Ireland (1) ISM (2) Italy (6) Japan (5) Jobless Claims (1) Korea (3) Labour Market (8) Liquidity (8) Manufacturing (3) Monetary Policy (18) Money (4) Money Market (1) Money Supply (10) Myanmar (1) New Monetarism (6) New Zealand (1) Oil (6) Payrolls (7) PCE (2) PMI (1) PMIs (1) Politics (9) Populism (6) Portugal (1) PPI (4) Production (1) Productivity (2) Profits (1) QE (5) Real Estate (1) Retail Sales (10) Russia (2) Services (3) Services PMI (1) Sovereign Bonds (2) Sovereign Debt (4) Spain (4) Sterling (1) Sweden (2) Technials (1) Technicals (52) TICS (1) Total Social Financing (3) Trade (10) TSF (4) Turkey (1) UK (18) Ukraine (1) Unemployment (5) US (35) USD (9) Vietnam (1) Wages (12)

In the Media