Economy

Now bad economic data is bad news too

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Stocks had a rough day as the weaker-than-expected economic data ignited new worries about the economy’s health. This sent S&P 500 and Nasdaq to fall sharply. As discussed, value stocks, predominantly in the Dow, stood against the tide, rose about 0.2% during the session.

Will the rate hike finally hurt the market?

Investors are focusing on the real impact of the successive monetary tightening policy on the economy. We are seeing the ISM service index falling sharply to 51.2 from 55.1. The expectation was 54.5. Also, private employers are adding fewer jobs at 145,000, a dramatic drop from 261,000 in the previous reading.

The mixed bag of economic data is set to spur new concerns about the economy’s health. The macroeconomic data appears to signal dark clouds gathering on growth stocks.

Inflationary fear is back once again- here’s how it happens

As we heard about OPEC+ cutting output, it is boosting oil prices and could now feed into the general economy, boosting the general price level.

Beyond that, we also hear about the latest corporate development regarding excessive inventory. These goods are sitting in expensive warehouses, and with the labour cost needed to clear these goods too, for some in a retail setting, thus incurring high rental costs, there is a desire to pass on the cost to consumers. Hence, this is yet another fuel for inflation.

What’s on the menu today?

At 8.30 pm, we will have the Initial Jobless Claims. We should see an uptick from 198K to 200K, reaffirming the weakening of the labour market. While this would have supported the equity market, considering the possibility of a weaker inflationary environment, the narrative of a recession is screaming louder now.

All eyes will be on this piece of data as we wrap up the last trading day of the week. Note that equity markets are closed on Friday.

It is 6 April 2023, Thursday, 8.35 am in Singapore and 8.45 pm in New York. We hope for better trading days ahead as we navigate a euphoria of headwinds. Stay nimble and safe, friends.