Please see below article received from Brooks Macdonald this afternoon, which provides an update on the US economy and markets.
What has happened
Ahead of a key monthly US jobs report due out later today, markets appear to have regained a bit more optimism. To be honest though, it’s hard to pin down the better mood to any one specific data point. In a somewhat familiar theme, once again, leading the broader US equity market yesterday were the so-called ‘Magnificent 7’ group of US megacap technology stocks. The latest return to positive market sentiment is likely to carry over into today’s session as well, given the better results from US tech company Apple that were reported after the US market close yesterday. Otherwise, overnight in Asia it’s been very quiet, with markets closed for holidays in both Japan as well as mainland China.
Apple announces biggest ever US share-buy-back
Apple shares jumped in late trading on Thursday after the company posted stronger-than-expected sales. The company also buoyed growth hopes looking forwards, having had to contend with a hitherto sluggish smartphone market plus headwinds out of China in recent quarters. Perhaps most significantly, Apple announced the biggest US buyback ever, at US$110bn. According to Bloomberg, Apple is currently responsible for 6 out of the 10 biggest US share-buy-backs ever made. Apple shares rose as much as +7.9% at one point in after-hours trading on Thursday.
US non-farm payrolls beckon
Later today, we get the latest monthly US non-farm payroll jobs employment data due out at 1.30pm UK time. This data is always closely watched, so today won’t be much different in that regard. In terms of what to expect, from a Bloomberg median survey estimate, payrolls are thought to have grown by a net 240,000 in April. Meanwhile, average hourly earnings are expected to have risen +4% over the past year, which if that’s the number would be the slowest annual growth in almost 3 years, since June 2021.
What does Brooks Macdonald think
It will be interesting to see if today’s US non-farm payrolls data points to any softening trends emerging in the jobs market that have been arguably hinted at from other data releases recently. The US JOLTS (Job Openings and Labor Turnover Survey) report for March that came out earlier this week for example showed that both job openings and the quits rate were down to their lowest in over three years. Ultimately, should we see some cooling off in the job market dynamics for economies more broadly, that isn’t necessarily a bad thing, and may even help support the narrative of a softening inflation pressure outlook.
Please check in again with us soon for further relevant content and market news.
Chloe
03/05/2024