Markets wait for the next interest rate decisions

This week we saw more of the bad news is good news effect. US equity markets have been part of the general rise in risk assets in recent weeks and the publication of economic data that was worse than expected on Monday gave US equities a leg higher as this seemed to reinforce the view that the US Fed will soon slow its rate hikes. However, markets seem to be looking for the positive as better-than-expected GDP numbers from the US were also welcomed as good news while slightly disappointing earnings updates from Intel and Microsoft failed to dampen the mood.

In the UK the picture is slightly reversed. Economic data shows the UK continuing to slow faster than other developed nations while many of the corporate updates – which this week included struggling industries such as pubs and airlines – were surprisingly upbeat. Although the news was in line with or exceeded expectations, UK equities lagged slightly. Government bonds were a bit weaker but fixed income markets have been relatively calm as investors await next week’s interest rate decisions from the Bank of England, Federal Reserve and European Central Bank.

For the following stories, please click on this link*

• Global – Equities rise as investors wait for rate decisions
• UK – Producer prices slowing as output falls
• Equities – Out of favour sectors have led the recent rally

(*Please note, The contents of this e-shot been prepared for general information only. It does not contain all of the information which an investor may require in order to make an investment decision. If you are unsure whether this is a suitable investment you should speak to your financial adviser. This information is not guaranteed to be correct, complete, or accurate. FE Research is a division of Financial Express Investments Ltd, registration number 03110696, which is authorised and regulated by the Financial Conduct Authority (FRN 209967). For our full disclaimer please visit www.financialexpress.net/uk/disclaimer. Data Sourced from FE Analytics, and Bloomberg Finance LP.)

Markets wait for clearer signals for direction of economic growth and interest rates

This week has been very much more of the same with most major markets waiting for something to happen. In the UK, news that inflation has come down a bit is good news but not enough to declare job done for the Bank of England. In the US, the job market remains healthy and doesn’t suggest a recession is imminent, although a closer look does reveal a few signs of weakness. In Europe, the European Central Bank was at pains to stress that it doesn’t intend to change course whatever the data, at least for now. Pretty much everyone accepts that a change is coming, although there is little agreement on what comes next. This week provided no new clues to when or what that might be.

Elsewhere, the reopening of the Chinese economy continues at pace. The sudden increase in global supply and the same pent up consumer demand we saw after our own reopening is set to reinvigorate a Chinese economy that was struggling with a deflating property bubble. As China is such a key part of the global economy its sudden revival could well be the catalyst for the anticipated change everywhere else.

For the following stories, please click on this link*

• UK – CPI eases slightly helped by falling petrol prices
• China – Investors hoping for return to growth as GDP lags in 2022
• US – Markets unsettled as jobs market remains tight

(*Please note, The contents of this e-shot been prepared for general information only. It does not contain all of the information which an investor may require in order to make an investment decision. If you are unsure whether this is a suitable investment you should speak to your financial adviser. This information is not guaranteed to be correct, complete, or accurate. FE Research is a division of Financial Express Investments Ltd, registration number 03110696, which is authorised and regulated by the Financial Conduct Authority (FRN 209967). For our full disclaimer please visit www.financialexpress.net/uk/disclaimer. Data Sourced from FE Analytics, and Bloomberg Finance LP.)

 

UK: Jobs market may be starting to cool as new hiring falls

New jobless claims in the US were lower than expected, but there are signs that labour markets there and in the UK are starting to cool. The number of people hired in the UK fell for the third month in a row, according to the Recruitment & Employment Confederation, which also reported that starting salaries increased at the slowest rate in almost two years. The Office for National Statistics reported that the number of online job adverts dropped in early January (usually a busy month for recruitment) and the number of vacancies is around 16% lower than the same period last year.

Recruitment firms Robert Walters and Page Group both reported significant slowdowns in their earnings in the last quarter of 2022. Robert Walters said it was particularly affected by a drop in recruitment among US tech firm as it warned profits will be lower than expected. Page Group also reduced its forecast for profits as it reported fewer candidates for advertised positions as well as companies cutting back on their recruitment plans.

For the following stories, please click on this link*

• Inflation – Slows further, but Central Banks will want more evidence before changing tack.
• Inflation – US CPI falls to lowest in 12 months
• Equities – House builders looking for positives in a tough market

(*Please note, The contents of this e-shot been prepared for general information only. It does not contain all of the information which an investor may require in order to make an investment decision. If you are unsure whether this is a suitable investment you should speak to your financial adviser. This information is not guaranteed to be correct, complete, or accurate. FE Research is a division of Financial Express Investments Ltd, registration number 03110696, which is authorised and regulated by the Financial Conduct Authority (FRN 209967). For our full disclaimer please visit www.financialexpress.net/uk/disclaimer. Data Sourced from FE Analytics, and Bloomberg Finance LP.)