- Non-farm payrolls increased by 263,000 jobs in November, well above the estimate of 200,000
- The average hourly wage also rose, with the 0.6% gain being double what had been forecast.
- However, this week we also saw the average US house price fall for the third month in a row, and consumer confidence also fell after a recovery throughout the summer.
- Top weekly and monthly trades
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Major events that may affect your portfolio
Okay, okay, what do we have here? Some very solid economic data, some might even say downright impressive. Yes, amid all the talk of recessions and layoffs, it looks like the US economy is making its best impression of the “little engine that might.”
Where does this come from? The payroll and salary figures were announced today and the numbers are a bit startling.
Nonfarm payrolls rose by 263,000 in November, well above the estimate of 200,000. The unemployment rate was broadly in line with expectations, but remains low by historical standards at just 3.7 %.
Wage growth also jumped, with the average hourly wage rising 0.6%, double the November projection. This brings the annual figure to 5.1% against 4.6% expected.
Labor market strength comes despite large-scale layoffs in the tech industry, aggressive Fed rate hikes and continued speculation of a coming recession. These latest figures mean that the Fed is going to have to seriously think about how it will proceed at the next FOMC meeting in just under two weeks.
As the economy continues to show surprising levels of resilience, inflation has also started to decline. While the Fed hopes to lower inflation without completely crushing the economy, it hopes that slower increases will allow it to follow this fine line over the next six to 12 months.
But on the other hand…
Consumer confidence is down and the house price index has fallen further.
The house price index fell 0.8% in September, marking the third consecutive month of negative growth. This comes at the same time as the number of transactions has fallen, mainly due to the massive increase in interest rates which has sent the costs of new mortgages skyrocketing.
Since the end of 2021, the average 30-year fixed mortgage has fallen from around 3% to just under 7%.
At the same time, consumer confidence fell in November after recovering some ground over the summer months. Consumer sentiment data from the University of Michigan rose from 59.9 in October to 56.8 in November, though that figure is still well above June’s low of 50.
That’s the story right now. It’s not all good news there, but it’s not all good either.
One day we get data that makes it look like the economy is about to tip into a recession, then a few days later we get different stats that make it look like things aren’t so bad . I mean, don’t get me wrong, if we had to choose, we would prefer the current status quo to a plummeting economy.
Nonetheless, this makes planning for the future and structuring an investment portfolio a challenge. Are you preparing for the worst and on the defensive, or are you swinging for the fences and positioning your portfolio for growth?
This week’s flagship theme from Q.ai
There is no way to know for sure what the markets have in store for us in the near term. We use AI to make predictions about the likely performance of all sorts of assets over the coming week, but we don’t expect them to be 100% correct 100% of the time.
The idea is simply to be right for enough time to allow investors to make solid gains over the long term.
And besides, even the world’s most impressive machine learning algorithm can’t drive the stock market up. If the overall market is falling, picking the best stocks over the coming week simply means that they have fallen a little less than the others.
This is why portfolio protection can be so powerful. Downside protection is something that all the best hedge funds in the world do. They do this to keep their clients safe during volatile markets, allowing them to bounce back from a higher base once the markets turn.
At Q.ai, we use our sophisticated AI algorithms to do this. This means we can make a complex hedging strategy available to everyone, which is usually reserved for high-flying hedge fund clients.
For investors with portfolio protection enabled, our AI scans their portfolio weekly and assesses sensitivity to various forms of risk, such as interest rate risk, market volatility risk, and oil risk. It then automatically sets up hedging strategies to try to compensate for them.
It is a powerful tool in a market whose short-term future is very uncertain.
Best Business Ideas
Here are some of the best ideas our AI systems recommend for the week and month ahead.
One Gas Ince (OGS) – The natural gas distribution company is one of our Best buys for next week with an A rating in low volatility and a B in quality value. Revenues have increased by 38.5% over the past 12 months.
Applied Digital Corp (APLD) – The data center operator is our Next week crop top with our AI assigning them an F in quality value and a B in low momentum volatility. Earnings per share were -$0.18 in the 12 months to the end of August.
Ideonomy (IDEX) – Electric vehicle trading company is one of our Next month’s best buys with an A rating in technique and a B in quality value. Revenue increased 13.9% in the 12 months ended September 30.
Insulet Corp (PODD) – The medical device company is one of our Next month’s best shorts with our AI giving them an F in terms of low volatility and quality value. The net profit margin is only 1.5%.
Our AI’s Next month’s top ETF trades is to invest in South Korea, U.S. silver and natural gas and in short and long term Treasury bills and Pacific stocks. Best buys are the iShares MSCI South Korea ETF, the iShares Silver Trust and the US Natural Gas Fund LP. Top Shorts are the iShares 20+ Year Treasury Bond ETF and the Vanguard FTSE Pacific ETF.
Recently Released Qbits
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