11 April 2023

Signs of cooling from the U.S. labor market

In the past week the main theme for financial markets has been the U.S. labor market, with three data points hinting at a cooling of employment and for some, a risk of recession becoming more apparent. In February, job openings fell below 10 million, while March new employment stopped at 236,000, the lowest since December 2020.

In the past week, 63 percent of the tools and indexes used for our analysis had a positive change. Thirty-seven percent experienced a negative change. Analyzing by macroclass, 56% of equity instruments and indexes recorded a positive weekly change. 95% of bond instruments and 72% of other asset classes used for our analysis.

Improving valuations in the past week were 20% of the total. The previous week, valuations that were upwardly adjusted were 49% of the total.

Among the analyses related to the equity sector, improving valuations were 20% of the total.

Among analyses related to the bond segment, improving valuations were 31.25% of the total. In the analysis by duration, intermediate and long-term maturities continue to excel, a sign of a continuing inversion of the curve.

Among analyses for other asset classes, improving valuations accounted for 23 percent of the total. Analyses related to sentiment, commodities, and currencies are included in this section.

Of the valuations made, 33% turn out to be above average in the short term. 43% turn out to be above the long-term average of valuations. Last week they were 55% and 46%, respectively.