🎢Markets to the moon🗽

The equity market rose sharply after Uncle Powell signalled the readiness of the Fed to slow its rate hike pace. This helps to increase the odds of a 0.5% rate hike in the upcoming FOMC meeting. The Fed is seeking more clarity on the impact of a rate hike on the economy. It becomes a delicate act to balance the need to slow down inflation while cushioning the economy against a hard landing- or some call a prolonged recession. 

However, the cutting rate is off the card, according to Uncle Powell. Moreover, it is expected that even if the rate hike does slow down, it is likely to stay at an elevated level for a more extended period. 

🧸Labor demand is cooling off🕹

The number of jobs opening reduced to 10.3 million, which is about the same level seen in August. This is a positive step towards a weaker labour market though still firm, but much lower than the peak we saw at 11.9 million in March. 

Interestingly, the figures on layoffs and discharges were still relatively steady despite the news, often broadcasting retrenchment. Pika World will be monitoring the progress more closely. 

In general, October data does signal the trending down on labour demand as employers now aim for fewer new hires, and more employees stay on to their current job. It is a good sign for equity and good news for the Fed as its blunt monetary policy appears to be slowly feeding into the general economy. 

🎁Snowflake: Dust in the sky💸

Shares were significantly down in the after-hour after it poses forecasts much weaker than estimates. This is despite robust 3Q results where sales hit $557 million, well above the expectations of $539 million. 

It comes at a time when we see cracks in corporate earning recessions, especially in business spending on hardware and software. So Pika World signalled caution as we are in euphoria purchase mode on the general market. 

📮What’s on the menu today?📖

Again, we have important data for the day. 

At 9.30 pm, we will receive the Core PCE price index for October. It should slow to 0.3% from 0.5% in the prior quarter. This inflation reading is crucial.

Likewise, Initial Jobless Claims should remain stable at 235K when released simultaneously. 

Personal spending is expected to climb from 0.6% to 0.8% in October. 

At 10.45 pm, the data on Manufacturing PMI is likely to show a contraction at 47.6, unchanged from the prior period. 

ISM Manufacturing PMI data will be released at 11 pm. We expected it to move into contraction territory from 50.2 to 49.8.

We have sold most of our Russell positions and are looking for re-entry. We had taken a substantial hit in our Russell shorts (pretty bad trade yesterday) but remained positive for November (diluted our gains). 

Pika World remains cautiously optimistic as the market recovers pretty fast, and there are more hurdles to clear in the coming day and weeks. 

It is 1 December, Thursday, at 8.55 am in Singapore and 7.55 pm in New York. It is the month’s first trading week and the year’s final month. Pika World wishes everyone a prosperous start!