Marc Chandler – Recession Fears Recede As Inflation Concerns Take Center Stage Next Week
Marc Chandler, Managing Partner of Bannockburn Global Forex and Editor of the Marc To Market website, joins us for a discussion on the macroeconomic factors moving the markets. We kick off the discussion with a recap of the Non Farms Payroll jobs report coming in higher than expected and how this may stave off some of the recession worries in the near-term. This data is counterbalanced with the caveat that US jobless claims numbers have been steadily rising since March of this year, as much as 40% off the lows, which is showing a bifurcating picture of the health of the labor markets. Even when considering this though it would need a 50% reading or higher and another data point, the Sahm Rule which is a recession indicator, is still flat. Marc feels that even if the Atlanta Fed’s GDP Now readings are correct showing 2 quarters in a row of negative GDP growth, that the labor markets are where the Fed will be watching for clues.
Next week things shift over to the markets focusing on inflation readings through the CPI and PPI readings, where many are expecting persistently high headline inflation and yet a continued lower trend in core inflation. We discuss potential scenarios if the numbers come in hot or cold, and what that could mean with regards to the Fed rate hikes and tightening cycle. We wrap up with some thoughts on the strong US Dollar in relation to other key currencies that have weakened in relation, and a look a the health of the general equities markets.