Conference Call Registration Link:

https://trahanmacroresearch.webex.com/weblink/register/r321ef092b3cba52d8cca8797c79328fd

The labor market is always a focus for investors and economists alike, but last week brought it into greater focus with a slew of new data releases. The fact that the unemployment rate was steady at 3.7% in December may seem uneventful at first glance, but the data beneath that figure showed a large decline in both household employment and labor force participation. That’s not great news for the economy, nor is the fact that nonfarm private payroll growth slowed to 115K per month in the fourth quarter. The Employment component of the ISM Manufacturing and Services reports has been a good leading indicator for the unemployment rate over time. Last Friday’s Services Employment Index, in particular, showed a shocking drop. The fact that the Employment figures in both surveys are now below 50 tells us to expect a rise in the unemployment rate in the very near future.

The Macro Week In Review

The Macro Week Ahead

1. Inflation grabs the spotlight from the labor market. U.S. consumer price inflation out Thursday should show a further easing in price pressures, with the Y/Y core rate expected to drop below 4% for the first time since August 2021. This would keep the Fed on track to begin reducing interest rates by the spring.

2. Earnings season begins. S&P 500 companies begin to announce fourth quarter earnings results next week, with some of the big banks kicking things off. Earnings estimates for 2024 look too high to us, so we are most interested in what firms say about their revenue targets for this year and less about how things were going in the fourth quarter of last year.

3. Producer price inflation is all about margins. Consumer prices get the bulk of the headlines, but producer price inflation has fallen much further and much faster, indicating that businesses selling to other businesses have largely lost their pricing power. If consumers show a similar refusal to pay higher prices for goods and services, profit margins for many firms will be squeezed … and soon.

Three Things We Read This Weekend

Macro Specialist Executive Education

The Macro Specialist Executive Education program is tailored for the busy investment professional. The content covered in two days is an intensive overview of the first level of the Macro Specialist Designation (M²SD) study program, focusing on practical investment techniques and a live, interactive simulation.

The Macro Specialist program has partnered with Macrobond and participants will receive 3-months of free access to Macrobond's state-of-the-art macro data and analytics! Macrobond delivers the world’s most comprehensive source of economic intelligence for financial professionals, together with the analytical tools that help them quickly find, analyze and visualize relevant data.

In just two days you will learn how to:

• Successfully implement business cycle analysis and macro techniques into your investment process.

• Identify anticipatory macro data that can help predict the path of leading indicators, including the equity market.

• Understand common human behavioral biases and how they impact investors' decisions—including your own.

• Interpret changes in monetary policy and trends in interest rates to anticipate future developments in markets and the economy.

• Chart key macro data relationships with the appropriate lead/lag times. 

$400 Early Bird Discount For Toronto if registered before January 31!

For more information and to register for one of our events, please visit:

https://macrospecialistdesignation.com/macro-summits/