Uptober Off to a Good Start
Oct 7, 2022
• 9
Min Read
Macro Update
The narrative in macro-land skewed negative this week until a strong jobs report on Friday morning.
JOLTs data showed a big surprise to the downside, as job openings declined 10% in August. A job opening total of 10 million was materially lower than the 11 million consensus estimate and was the most significant 1-month decline since the start of COVID. Fewer job openings suggested a softening labor market.ISM Manufacturing PMI fell abruptly to 50.9 in September, significantly below market expectations (52.2), and signaled that the economic expansion witnessed in the preceding 28 months is slowing faster than expected. It appears that companies are starting to prepare for reduced economic demand.Despite the JOLTs data rolling over, the economy registered an unemployment rate of 3.5%, below a consensus estimate of 3.7%, as the total nonfarm payroll increase of 263k was above the consensus estimate of 250k. However, of note, fewer jobs were created in September than in both August and July. Ultimately, the market interpreted this as a signal of a persistently strong economy.From a narrative perspective, international markets continue to be disproportionately affected by the Fed’s current tightening endeavors. Australia showed the first sign of central bank capitulation,...