Virtue Signaling

Finimize

Contributor:
Finimize
Visit: Finimize

What’s going on?

Data out on Friday showed that the US added way more jobs than expected last month, and aren’t you going to hear about it…

What does this mean?

The US was past the worst of Omicron last month, which helped companies really get down to business: the US added 678,000 jobs, compared to the 440,000 economists were expecting. That’s the biggest monthly uptick since July, and means the total number of Americans in employment is now around 1 million short of where it was before Covid. The leisure and hospitality sector – which was hit hardest by pandemic restrictions – kept up its strong showing from the month before with 179,000 new starters, but sectors like professional services, healthcare and construction all posted tidy numbers too.

Why should I care?

For markets: Once the Fed pops, it won’t stop.

The Federal Reserve (the Fed) said last week that it’s still planning to hike interest rates this month, and Friday’s data suggests the economy’s strong enough for it to do just that. And since the central bank said it’s expecting the Russian invasion to push prices even higher, it didn’t rule out even tougher measures: the Fed said it might hike rates a number of times this year, and potentially by more than the normal 0.25%. That might be why traders are now betting that rates will be around 1.5% higher by the end of 2022.

The bigger picture: Europe does a U-turn.

The European Central Bank (ECB) isn’t on such sure footing: the region’s economic growth isn’t just at risk from rising inflation, but also from a war that’s hampering trade and investment. The ECB hadn’t intended to raise interest rates anytime soon like the Fed did, but it had intended to roll back its bond-buying program. Now, though, some economists think the ECB might put that plan on hold.

Originally Posted March 4, 2022 – Virtue Signaling

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with permission from Finimize. The views expressed in this material are solely those of the author and/or Finimize and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.