The U.S. economy grew faster than previously thought in the third quarter, according to a second estimate from the U.S. Bureau of Economic Analysis on Wednesday. GDP in the U.S. grew by 2.9% YoY in Q3, according to the revised figures (U.S. GDP had shrunk 0.6% YoY in Q2 and 1.6% in Q1). This represents an increase from the previous estimate of 2.6% growth, showing the U.S. economy is still faring well in a higher interest rates environment.
The Institute for Supply Management showed on Thursday that the manufacturing sector grew for the 30th month in a row but was barely above contraction in November. The ISM’s index slowed to 49%, barely above the contraction threshold at 48.7%. This is the third straight decline as demand for manufactured goods eased. The slowdown was broad-based as production, inventories, new orders, prices paid, and employment all slowed down on the month.
Overall demand remained robust as holiday shopping kicked off in October, according to data on inflation, spending and income from the Bureau of Economic Analysis released on Thursday.
The Federal Reserve’s preferred inflation metric – the personal consumption expenditures (PCE) price index—came in better than expected. While overall PCE inflation was unchanged at 0.3% MoM, core inflation slowed significantly to 0.2% from 0.5%. On an annual basis, inflation eased to 6.0% while core inflation was down to 5.0%.
International Monetary Fund Managing Director Kristalina Georgieva said on Thursday the chance of global growth falling below 2% next year was increasing due to continued effects of the war in Ukraine and simultaneous slowdowns in Europe, China and the United States.
The IMF in October cut its global growth forecast for 2023 to 2.7%, compared to a 2.9% forecast in July, amid colliding pressures from the war in Ukraine, high energy and food prices, inflation and sharply higher interest rates, warning that conditions could worsen significantly next year.
The highly anticipated monthly Nonfarm Payroll report on Friday showed that the U.S. economy unexpectedly added 263K jobs in November, beating market forecast of 200K, following a print of 284K in October, despite a wave of layoffs that have hit the tech sector in recent weeks. While this is the smallest gain since April 2021, the labour market continues to be healthy and above the pre-pandemic average of 150-200K new jobs a month.
Equity markets rallied across the board on Wednesday as Fed Chair Jerome Powell signalled a slowdown in the pace of interest rate hikes at its final policy-setting meeting in December. And while this is a shift, not a pivot, and rates could go higher than forecasted earlier and stay elevated for a while, markets got excited and staged an impressive rally with the NASDAQ 100 gaining 4.6% on the day. There was a degree of scepticism around this market response, given that it essentially aligned with market expectations for the past few weeks, but sentiment shifted favourably, nevertheless.
Friday’s stronger than expected jobs report spooked the rally and U.S. equity futures are trading deeply in the red. The tight labour market conditions and the sharply rising wages are likely to be too high for the Fed’s liking.
The NASDAQ 100 rebounded close to its medium-term down trend line crossing at 12,200 where initial selling pressure is likely to arise. If the enthusiasm that a slowdown in the Fed rate policy cannot inherently carry the current rebound forward, then other concerns will start to leak in – such as the threat of a recession. Overall, we see the current rally as having a limited upside potential and we favour further weakness in the coming months.
Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.
Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.
Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.
Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.
Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.
È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.
Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.