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US Job Creation Slowing, Our Views on S&P 500 and Nikkei 225

US Job Creation Slowing, Our Views on S&P 500 and Nikkei 225

While many of our readers are in some way long-term students of markets, we all in when you think about it, we have a lot of Millennials who are studying and just getting started in financial products. So we have a guides section to ensure that they are plugged in to current ideas in finance. 

Today we will see the Non-Farm Payrolls report in the US, and here are some bullet points and our viewpoints below. 

1. We see the range for Payrolls moving from 220,000 per month to 150,000 per month – a repricing for several reasons. Keep reading. 

2. Initial unemployment claims have been moving higher as job growth is cooling, now on both the supply and demand  side of the equation  but overall numbers are solid given the trade war and the idea that we are running out of workers. Markets are pricing in a rate cut, but will be an insurance? 

3. The idea of dropping from 220,000 to 150,000 or lower will be a resetting of the range on our view – this is more than just a supply demand issue for workers but the trade war could be instilling fear on the business community, possibly far more than many think, so think in terms of future uncertainty. 

4. The fear if economic slowdown, uncertainty of trade and tariffs, small business hiring and other factors surely point to a justification of GDP forecasts at 1.5% to 1.8% for the second half of 2019 – we surely understand and accept that deceleration of 2019 growth in both job creation and GDP expansion will be lower than 2018. 
We feel equity indices trade lower, much lower in July and August. S&P 500 above 3,000 is likely to be a short-term event. 

 

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