市场概览与本周焦点

Hello my friends. Today is December 20th, and this is Markets Weekly. This week, markets were very choppy. It didn't seem like much was going on, and that Santa rally that many, including myself, have been expecting just isn't there, at least not yet. We only have a couple of weeks left in the year. The S&P 500 is about a couple of percent away from 7,000. Let's see if it can get there. I was thinking this week would be about the market outlook, but actually, this past week was a full trading week. We'll do that next week when it's a shortened holiday trading week.

数据发布与日本央行动态

So, today, let's talk about two things. First off, we have to talk about the massive data dump we got this past week. We got sales, employment, and inflation. It really was a lot of data. And secondly, let's talk about what's happening in Japan, where the Bank of Japan hiked rates again to 0.75%. At the moment, it doesn't seem like that's impacting markets too much.

数据等待与市场影响

First, starting with the data. Everyone has been waiting for this data. We had a government shutdown that lasted a long time, and so a lot of market participants have been basically flying blind. Now, the Fed would tell you they haven't been flying blind because they have all sorts of data collection capacities, which is true, but still, these government official data releases are very influential. This past week, we got two of the most important ones: the jobs data and the CPI (Consumer Price Index: A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services).

就业数据分析

Starting with the jobs data, honestly, we got jobs data for November and October, and it was kind of a mixed bag. On the surface, you can say that in October, there was a huge loss in jobs, over 100,000, and maybe that's why it wasn't released initially. In November, you had a bounce back with decent job growth, but if you average the two months, it doesn't look that great. Looking at other measures in the jobs market report, you can see that the unemployment rate actually ticked up to 4.6%. That's higher than the Fed's median forecast of 4.5%.

就业市场细微之处

To be fair, it was a pretty weak 4.6%; it was around 4.55 something and rounded up. The reason for this increase in the unemployment rate seems to be, in part, that the labor force participation rate is increasing. This means more people are re-entering the job market and looking for a job. This increase in supply will obviously make the unemployment rate look a little bit worse. Although wage data has been decelerating for the past few months. So, when you have these supply and demand dynamics, including changes in immigration and so forth, it's hard to look at quantities. We can always look at price, and the price, which is wages, is very clearly decelerating. So, on the surface, it is a weaker report, especially because of the 4.6%.

IBM 与私营部门就业

At IBM, both in the US and globally, we have the lowest voluntary attrition in 30 years. To me, that's a pretty clear statement that people are not looking to change jobs, and the numbers in the US are strong. We often run about 7% voluntary attrition, putting retirements and forced separations aside. It's under two percent. Now, Bloomberg has a very useful analysis. When they look at it, they note that if you focus on private sector job growth on a three-month moving average basis, it's actually trending higher. A lot of the decline in headline jobs has to do with a loss in government jobs. Remember earlier in the year, Elon Musk's Doge initiative offered a buyout to government employees: if they resigned, they could get a lot of benefits.

数据解读与政府影响

It looks like about 100,000 people took that offer. As those people fell off the payrolls, the Doge agreement allowed them to continue being employed and collect salary without showing up in the office, but they would eventually fall off the payroll in October. So, that big negative jobs number in October is in large part because those who took the Doge offer finally fell off the payrolls. When you exclude that and focus more on private sector job growth, which many people think is a better indicator of the economy's health, it seemed to have bottomed a few months ago and has been trending higher. President Trump has a memorable tweet where he said he could get the unemployment rate down to 2% just by hiring a whole bunch of people through the federal government. But people perceive government hiring as not as indicative of the economy's health and probably not as productive either. So, there are reasons to think the labor market could be turning a corner, seeing that private job growth is gradually picking up again.

通胀数据意外与数据可靠性

Moving on to inflation data. The CPI kind of shocked everyone. The market was expecting about a 3% CPI; it ended up around 2.7%, and the core was low as well. That was very surprising to many people. Looking at the details, it becomes clearer why it was surprising. If you look at the BLS's (Bureau of Labor Statistics: The agency of the U.S. Department of Labor responsible for measuring labor market activity, working conditions, and pay and benefits) CPI data, you can see there were a lot of blanks. The government shutdown impacted data collection for CPI, just like it impacted non-farm payrolls. There were a lot of blanks. When they started collecting again in November, the thinking was that some prices were a bit lower, perhaps due to holiday season discounts.

数据可靠性与政治考量

There's also commentary about assumptions made by BLS staff, such as regarding rent, which seem lower than expected. So, this CPI data seems unreliable, and the market appears to dismiss it. There's also a line of thinking: is this real? Are they cooking the books? Recall that not too long ago, there was bad data, and the BLS commissioner was fired by the president. An appointment has not yet been made to replace that person. Also, the night before the CPI announcement, the president actually had an official address to the public. In that address, aside from giving $1776 bonuses to military personnel, there were slides highlighting concern about affordability and inflation, showing the White House understands this is a major political issue and is shifting gears to address it.

零售销售与整体经济信号

Is one way to address this having assumptions that yield a lower CPI? I have no idea. We'll find out in the next CPI print, which won't be tainted by the government shutdown. Let's see if it's more in line with what private forecasters anticipate. In addition to these two big data releases, we also got retail sales. Again, a good measure of the economy's health. Retail sales, excluding auto and looking at the control group, were actually pretty strong and appear to be accelerating. Retail sales are nominal, so some of that could be inflation.

美联储政策预期与官员评论

Taking a step back and looking at all these data prints, you'd think it would suggest easier monetary policy: the unemployment rate ticking up and CPI coming down. But despite some volatility, the market doesn't seem to have changed its expectations of Fed policy much. A Fed official, John Williams, came out on Friday and basically dismissed the data prints, noting that weird things are happening because of the government shutdown.

数据失真与美联储人事

He suggested that according to his calculations, unemployment ticked up slightly but is probably at 4.5%, not 4.6%, and CPI is probably a tenth too low. So, still improving, but not by the massive amount suggested by the print. On the headline, there were some special and technical factors related to the inability to collect data in October and the first half of November. This distorted the data in some categories, pushing down the CPI reading by perhaps a tenth. It's hard to know, but it looks like nothing significant is happening on that front. On a related front, there's more political drama about the next potential Fed appointment.

美联储主席人选博弈

Looking at the odds for Kevin Hassett, who seemed like a lock not too long ago, they have fallen. He's still the favorite, but you see other people like Kevin Walsh and Governor Waller ticking higher in the odds. From what I hear, there's a group opposing Kevin Hassett and trying to make their case to the president. My impression is that group includes Secretary Bessant. So that's sizable opposition. Of course, the president likes Hassett and has worked with him many times, so he's still the favorite, but you do have these other people being interviewed. So, it's no longer a lock as it used to be. I continue to think Kevin Walsh would be a very strange pick, as he is basically a lifelong hawk. Okay, so we'll see how that plays out