• Last month’s job growth surprised to the upside. This report deviated from the Fed’s anticipated trend of a loosening labor market.
  • Once again, healthcare, local government, and leisure & hospitality were the key contributors to job gains
  • The ISM Services PMI showed a sharp deceleration in growth.

 

 

  • The biggest surprise was a significant downturn in services sector employment, a trend that was absent from the jobs report.

 

 

  • Here is a look at consumer credit rates. The sharp increases will take time to work their way through the economy.

 

 

  • US consumer credit rose sharply in November, exceeding $5 trillion for the first time.
  • Consumers tapped their credit cards, with real balances now exceeding the pre-COVID peak.
  • Credit card rates hit a record high.

 

 

  • Auto loan rates reached their highest level in over two decades at 8.51%.
  • Government-owned student loan balances are down $36 billion relative to November of 2022, mostly due to debt forgiveness.
  • Inflation expectations have been moderating, according to the NY Fed.

 

 

  • Housing inflation remains elevated
  • Economic growth came in well above consensus expectations last year …

 

Source: BCA Research

 

  •  … forcing economists to reverse their forecasts.

 

 

  • Expectations for this year’s GDP growth are relatively tempered, …

 

 

  • A slowdown in rent increases may indicate a potential easing of core inflation toward the target.

 

 

  • The GDPNow model estimate for the Q4 economic growth is holding above 2%.

 

 

Market Data

 

  • The Nasdaq 100 underperformed sharply last week.

 

 

  • Insiders are nervous.

 

 

  • Share buyback activity has been strong.

 

Source: BofA Global Research; @MikeZaccardi

 

  • Largest US tech firms:

 

 

  • Copper is lagging cyclical shares.

 

 

  • US office vacancy rates hit a record high

 

 

  • A conflict in the Taiwan Strait involving the US and China would lead to severe repercussions for the global economy.

 

 

  • Oil flows through the Bab-El-Mandeb Strait continue to trend lower.

 

Source: Goldman Sachs; @MikeZaccardi

 

 

  • Expectations for US tech long-term earnings growth have soared.

 

 

  • On average, the S&P 500 trades sideways during the first quarter of an election year.

 

 

Great Quote

 

“When you talk, you are only repeating what you know.  If you listen, you may learn something new.” – Dalai Lama

 

Picture of the Week

 

A new volcano erupts in Iceland

 

 

 

 

All content is the opinion of Brian Decker