#FACTSET STOCK PRO AND CONS DRIVER#

Where could there be challenges?įed not done: Last week, we also heard from several Fed officials, including Fed Chair Jerome Powell, that the Federal Reserve sees rate hikes continuing as needed. Particularly in the U.S., which is home to an outsized number of large technology firms, more innovation can ultimately lead to higher productivity, which supports better potential economic growth rates over time. More broadly, while there will be winners and losers as new technologies develop, the open-market competition between highly skilled tech players could lead to innovations that benefit all consumers. The Microsoft-backed ChatGPT has already added 100 million active users, just two months into its launch, making it the fastest-growing app in history. Tech giants like Microsoft and Google both unveiled AI-powered search engines that featured enhancements to traditional search, including shorter, more concise results, higher efficiency, and even more humanlike interactions. Innovation takes center stage: This past week we also saw artificial intelligence (AI) and innovation once again make the headlines. While this has been a unique cycle with demand for labor outpacing supply, the last jobs report also indicated that labor-force participation may be moving slowly higher. Keep in mind that the labor market tends to be a lagging indicator, and often other economic measures will show signs of cooling first, like ISM data and retail sales (both of which have been weakening). However, in our view, the healthy pace of both job gains and jobless claims will likely not be sustainable and may point to a softer labor market from here. The stronger labor market ultimately supports consumers and consumer confidence, which could keep demand trends elevated in the near term. This indicates that despite headlines around layoffs (concentrated largely in the technology sector), jobless claims continue to reflect a healthy labor market. In addition to the jobs report, real-time weekly jobless claims data continues to remain resilient, with weekly claims averaging about 193,000 in 2023 thus far, below last year's average of about 215,000. The unemployment rate fell to 3.4%, the lowest in decades, while wage growth also moderated. jobs report highlighted this clearly – 517,000 new jobs added versus expectations of just 185,000. Labor market continues to defy gravity: Certainly, one of the bigger upside surprises for the market has been the strength of the labor market. Any negative surprises could spark outsized market volatility. is on Tuesday, with expectations for headline inflation to fall from 6.5% to 6.2% and core inflation to fall from 5.7% to 5.4% annually. The next CPI inflation reading in the U.S. In fact, there are some indications that areas like used car pricing is starting to tick higher, oil prices are moving upward again, and housing markets may be stabilizing somewhat. However, while our view is that core inflation will head towards 3.0% this year, this may not occur in a straight line lower, and it may not consistently surprise to the downside. This, of course, takes some pressure off the Federal Reserve and global central banks that have been raising rates aggressively to bring down inflationary pressures. Market forecasts now call for headline inflation to fall to under 4.0% by year-end and closer to 2.5% by 2024. has come down for six straight months and has been in line with forecasts or surprised to the downside for the last three months.

#FACTSET STOCK PRO AND CONS DRIVER#

Inflation continues to moderate: Clearly, better inflation data has been a key driver for markets over the past several months. Treasury bond yields moved higher, while oil prices climbed as well. Markets may be now approaching somewhat of a crossroads: Does the rally continue unabated or does volatility increase? Below we weigh the pros and cons that will perhaps determine the road forward. The S&P 500 was down over 1.0% on the week, its worst week of the year thus far. Most asset classes have participated, and the laggards of last year have particularly outperformed. However, last week some uncertainty and volatility returned to markets. The market rally this year has been impressive.

Factset stock pro and cons