In Pepperstone They explained that “Investors were forced to depend on private estimates and real -time models to try to capture the pulse of the activitysomething that naturally increases market anxiety. “
For the Federal Reservethe closure of the American government also implies a loss of important data, as the employment report that had to leave this Fridayjust when it approaches Your next monetary policy meeting on October 28.
“The institution, which depends on a wide range of official statistics to calibrate its vision of employment, consumption and inflation, now faces the possibility of deciding with an incomplete information set. This increases the risk that the Fed should rely more on qualitative perceptions or alternative indicatorswhich introduces an additional degree of subjectivity in their analysis, “they added.
Anyway, market expectations remain firm. According to Fedwatch what measures cme, Wall Street assigns 97.8% probabilities to a 25 basic points cut on October 29while for the December 10 meeting that percentage is 85.8%.
For his part, Personal Portfolio Analyst investors, Martin Cordeviola commented that in this context “Treasuries yields rise along the curve. The 10 -year rate advances 3 basic points, while the 2 -year rate does the same at 2 basic points. “
Do services slow down?
It is in this context that they met this Tuesday The PMI indicators of services published ISM and S&Ptwo of The most important private reports that look at wall street To know THE PULSE OF THE SERVICES SECTORthat represents 80% of the US economy.
Specifically, the PMI of S&P He showed a level of 53.9 points in September, above the estimated, but below the 54.6 points showed the previous month. For its part, the ISM index was 50 points, also below the estimated and of the previous month, when it was 52 points.
“Both indicators are in or above the threshold of the 50 points, which is consistent with an expansion of the services sector“Pepperstone analyst argued, Felipe Barragánbefore the consultation of this medium.
Cordeviola explained to this media that “The result is not surprising”. And he deepened: “The PMI of services has been throwing readings greater than 50 consistently since December 2023, and the ISM only in three months of that period was barely below that threshold.”
However, Barragán also stressed that “some key components of the ISM survey marked some weakness as the new orders, suggesting minors ‘orders’ by customers and therefore points to a deceleration in the ‘production’ of services, while the paid prices increased beyond expected, which generates some nervousness regarding the inflationary pressures that the sector is receiving“
In line, The ING Bank highlighted in its daily report that ISM data shows that commercial activity fell from 55 to 49.9. “This is the worst result from quarantine for pandemic in May 2020,” they explained. In addition, “the employment component increased from 46.5 to 47.2, but when staying below 50, This increase simply means that the rhythm of job loss slowed last month“
The labor market cools
In parallel, the Chicago Federal Reserve He published his projection of the unemployment rate of the Office of Labor Statistics (BLS) last night. “This estimate, based on 11 data, both private and public, indicated a high probability that The unemployment rate remains stable at or about 4.3%“They stressed from Wealth Managment.
They argued that the panorama presented by the Federal Reserve of Chicago “It’s consistent” With the data of Challenger usewhich measures the number of job offers, and the employment index of ADP, both published earlier this week.
“The figures indicate a labor market with low hiring and low layoffswhere unemployment remains low, but Unemployed face a long job search period“They explained.
The disruption of Shutdown threatens employment
On this point, from Wealth Managment they warned that “An unpredictable factor in the labor landscape is the treatment that federal employees considered non -essential“In previous closures, they recalled that” these workers were simply suspended temporarily during closing and received the full payment of their backward wages when the government reopened. “
However, Donald Trump’s government indicated that this opportunity will fire some employees. “If this happened, would tend to increase the level of unemployment and could limit, at least at regional level, economic growth“
Complementary, from Charles Schawbs They added that “the approximately 750,000 federal workers who are currently suspended, No salary or fired could affect discretionary spending and retail sales figures As consumer companies enter the very important quarter quarter. “
Source: Ambito
