13D Research & Strategy’s Post

On June 16th, we wrote as follows: "Has the Fed been too tight for too long? Have the “stronger” Establishment payrolls reports been misleading the bullish assessment of the U.S. economy, and the “weaker” Household jobs data have been more accurately signaling the faltering health of the U.S. economy? " Mid-2024 could mark an important inflection-point in markets and investor asset preference. 13D clients, stay tuned!

As widely expected, the FOMC left rates in the 5.25% - 5.50% and shifted to a more neutral stance, setting the table for a cut to occur in September, so long as the data continues to show stable to declining inflation and cooling to balanced labor market conditions. On the latter, we have received the first 2 reports on July employment (ADP) and job openings (JOLTs) and both indicate the cooling that the Fed is seeking. JOLTs fell slightly from an upwardly revised May figure; ADP reported a lower than forecast Employment Change and the Employment Cost Index decelerated more than expected. Wage growth also decelerated. Rates held steady after the Fed announcement at the lowest levels since March. On the other side of the equation, the Conference Board’s Consumer Confidence level rose more than expected and Pending Home Sales rose much more than anticipated, indicating that the economy is not collapsing into recession at this point. As we discussed in Sunday’s Agency and Capital Markets Update (link below), we believe the Fed is on track to make a move on monetary policy at the September meeting provided the data continues to be supportive. This week’s “main event” is Friday’s Jobs report where we’ll see if job growth continues to remain “in balance” (or continue to cool) and if unemployment has stabilized or is continuing to rise. Absent surprises, it should be another pair of data points that we can add to the Fed’s “growing confidence” bucket…Stay Tuned! Read the full article here: https://lnkd.in/g6YxVBgC Ramsey Daya, Chris Moritz, Joshua Braceros, Meghan Walsh Varga, Lillian Aceituno, Alec Newman, Garrett Swanky, John Kelley, Caitlin Barrett, Travis Bailey #newmark #multifamily #multifamilyrealestate #commercialrealestate #capitalmarkets #realestate #cre

Labor market data this week has emboldened wounded market bears and Fed hawks. The path across the monetary policy bridge has become more uncertain, with job growth, job openings and unemployment claims reflecting a robust labor market. This morning’s news that the U.S. economy added a stronger-than-expected 216,000 jobs last month while wages grew 0.4% is pushing up bond yields and worsening January’s equity market malaise. The BLS report, furthermore, follows yesterday’s ADP payroll beat, and is inconsistent with the Fed's 2% inflation target. For today’s release, economists anticipated job gains of 170,000 and only a 0.3% increase in average hourly earnings. While this morning’s data is supportive of continued consumer strength, it is complicating the stock market’s stretched valuations. Rates are likely to go higher and equities will probably correct further as the 10-year approaches 4.5%, compressing the stock market’s risk premium, or the earnings yield in excess of the interest compensation of risk-free, fixed-income alternatives. Relief from the Fed is also a headwind. Just a few weeks ago, the likelihood of a Fed cut in March seemed almost certain, but recent labor developments have significantly reduced those odds, bringing them much closer to a coin flip, possibly extending our journey across the monetary policy bridge. #Fed #Economy #Markets #Stocks #Rates

Fed's Cautious Stance Amidst Evolving Labor Market Recent developments suggest a shift in the Fed's approach, influenced by changing labor market dynamics. 📊 The Latest Jobs Report: A Mixed Bag - Non-farm payrolls increased by 216,000 in December, surpassing expectations - However, November's figures were revised down from 199,000 to 173,000 - The unemployment rate held steady at 3.7% 🏦 Fed's Response: - Top officials, including Governor Christopher Waller and New York Fed President John Williams, are signaling a cautious approach. - The central bank is considering potential rate cuts this year, a shift from their previous stance. - Concerns about "downside risks" to the economy are growing. 📈 Labor Market Trends: The graph illustrates a key trend: while job openings have decreased from their peak, they remain significantly higher than pre-pandemic levels. In November, there were about 8.8 million job openings, down from the March 2022 peak of 12 million, but still well above the pre-pandemic average of 7 million. 🔍 What This Means for Investors: - The labor market is softening but not deteriorating rapidly - The Fed is likely to move cautiously, balancing inflation concerns with economic growth - This environment could lead to increased market volatility #FederalReservePolicy #LaborMarketTrends #InvestmentStrategy #EconomicAnalysis #markets

𝐅𝐫𝐢𝐝𝐚𝐲 𝐔𝐩𝐝𝐚𝐭𝐞: 𝐉𝐨𝐛𝐬 𝐑𝐞𝐩𝐨𝐫𝐭 𝐒𝐡𝐨𝐜𝐤𝐬 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐰𝐢𝐭𝐡 𝐒𝐭𝐫𝐨𝐧𝐠 𝐆𝐚𝐢𝐧𝐬, 𝐮𝐧𝐞𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐟𝐚𝐥𝐥𝐬 𝐭𝐨 𝟒.𝟏% Today’s news reveals a labor market that continues to outperform expectations. 👉 𝐉𝐨𝐛𝐬 𝐑𝐞𝐩𝐨𝐫𝐭 𝐒𝐡𝐨𝐜𝐤𝐞𝐫: In a surprising turn, the U.S. economy added 254,000 jobs in September, far surpassing economists’ expectations of 150,000. This robust growth shows the job market remains strong, despite efforts by the Federal Reserve to cool down the economy through rate hikes. The unemployment rate also ticked down to 4.1%, from 4.2% in August, further indicating resilience in the labor market. 👉 𝐖𝐚𝐠𝐞 𝐆𝐫𝐨𝐰𝐭𝐡 𝐒𝐭𝐚𝐲𝐬 𝐒𝐭𝐞𝐚𝐝𝐲: Wage growth continues to be a key factor in assessing inflation pressures. In September, wages increased by 4% year over year, a slight uptick from August’s 3.9%. On a monthly basis, wages increased by 0.4%, keeping pace with last month’s reading. While wage growth is important for workers, it may keep inflation higher, complicating the Fed’s decisions. 𝐖𝐡𝐚𝐭 𝐃𝐨𝐞𝐬 𝐓𝐡𝐢𝐬 𝐌𝐞𝐚𝐧?: The stronger-than-expected jobs report may push the Federal Reserve to pause or slow down future rate cuts. While a weaker labor market would normally lead to more aggressive rate cuts, today’s data suggests the Fed might hold off on additional large cuts for now. #LaborMarketUpdate #EconomicGrowth #FedWatch

Why the Market is making new ATH with the fear of Recession? Let's zoom out a little bit to take a look at the four previous economic downturns in the U.S., we see that all of them get triggered when nonfarm payroll reports dip into negative territory. That means instead of the U.S. economy adding jobs, it's actually seeing negative job growth. And when that happens, that's when you can actually see some pretty big damage in U.S. stocks. So if you've been wondering why the U.S. stock market is still making new all-time highs, despite all of this news that we're seeing from financial outlets regarding a recession, it's because this data is not recessionary. Of course, this chart could see a dip in the coming reports. In fact, we've explained why we think that's eventually going to happen. But from a trading and investing standpoint, it's still too early for us to act on this data for now. Investors who panicked out of the market in any of these slight dips in nonfarm payrolls have been left out of the bull market. #MarketAnalysis #Investing #StockMarket #EconomicIndicators #RecessionWatch #NonfarmPayrolls #BullMarket #InvestmentStrategy #FinancialNews #PatienceInInvesting

🚨 Market Update from Vance Howard 🚨 📈 The S&P 500 is in its 11th longest stretch without a 2% down day since 1928! In other news... 🌟 The strong uptrend continues according to the HCM-BuyLine®️. 🌟 It's been an interesting week following a highly debated political landscape. 🌟 The Conference Board’s Employment Trends Index indicates slower payroll growth ahead. 🌟 On the inflation front, the NY Fed’s survey shows a slight easing in expectations for June, with the one-year outlook down to 3.0%. More insights from Vance Howard ⬇️⬇️⬇️ Howard Capital Management, Inc. #markets #investments #economy #stockmarket #volatility #finances #wealth #inflation #election #bullmarket #wealthwatch

Labor market showed signs of resilience in August. But did the Fed act soon enough to head off a recession? [supporting figures are in the comments section] Businesses added a net 142,000 jobs in August, on par with the average for the past five months once downward revisions to June and July are taken into account. This is down from a monthly pace of nearly 200,000 new jobs over the past twelve months. The unemployment rate was essentially unchanged from July, ticking down one-tenth of a percent to 4.2% Industries adding the most jobs were construction and the leisure and hospitality sector. Manufacturing shed jobs, and its payrolls are essentially unchanged over the past year. This is consistent with other data that indicate flat manufacturing sector activity. With these data, we are about where we should be, with the labor market continuing to soften, but not precipitously. This takes pressure off prices and is closing in on the "soft landing" that the Fed has been aiming for. If achieved that outcome would probably mean somewhat more job losses than we have seen so far, but no outright economic contraction. The question is whether the Fed is acting too late to avoid a recession. They are widely expected to cut interest rates when they meet in a couple weeks, likely by a quarter point. This will encourage borrowing and spending, it will provide some relief to those households with high credit card debt, and support the suffering housing industry. But because of the lagged and uncertain effects of monetary policy, how much this cut—and the ones to follow—can head off more dramatic slowing remains to be seen. #labormarkets #employmentsituation #jobs #unemployment #federalreserve #fed #interestrates

Market Meltdown: S&P 500’s Worst Day Since August 5th – What’s Next? The S&P 500 experienced its worst day since the August 5 meltdown, sparking déjà vu among investors. Last month’s downturn was driven by data indicating a slowing U.S. economy, and yesterday’s weak manufacturing data has renewed those concerns. While economists still believe a recession is unlikely, a steady stream of underwhelming growth data, particularly in the labor market, has unsettled some investors. The Federal Reserve is now considering cutting interest rates. Key upcoming events include today’s JOLTS employment data and the Fed’s Beige Book economic report, with a major focus on Friday’s payrolls report. Economists predict that employers added around 163,000 jobs in August. A softer number could prompt the Fed to cut rates by 50 basis points, according to Andrew Hollenhorst, an economist at Citi. “We could see significant volatility on Friday as we interpret the jobs report and as Fed officials do the same,” he noted. Stay tuned for more updates and insights. How do you think the market will react? #Economy #Investing #StockMarket #Finance #FederalReserve #JobsReport

Is Tomorrow’s Jobs Report the Game-Changer Wall Street Needs? For months, the steady stream of reports on US employment, consumer spending, and other key economic indicators has kept Wall Street on its toes. The often context-free coverage of the Federal Reserve’s potential interest rate cuts has only added to the uncertainty. However, tomorrow’s jobs report might be the one that truly matters. On Thursday, stocks fluctuated wildly as investors braced for this critical data release, which is seen as pivotal ahead of the Federal Reserve’s meeting later this month. With Fed Chair Jerome Powell’s recent focus on the labor market, many industry experts believe that Friday’s US payrolls report will determine whether the Fed cuts rates by 25 or 50 basis points. Until recently, the latter seemed unlikely. How do you think the upcoming jobs report will impact the Fed’s decision on interest rates? Share your thoughts! #Finance #Economy #FederalReserve #JobsReport #WallStreet #Investing #InterestRates #EconomicTrends