1. US non-farm payrolls – 02/12 – despite concerns about the strength of the US economy the labour market, has thus far continued to hold up well, with weekly jobless claims currently averaging around 225k per week. In October non-farm payrolls came in at 261k, while the September jobs number was up to 315k. Slightly more disappointingly was the fact that the unemployment rate edged up to 3.7%, while wage growth slowed to 4.7% from 5%. The report also served to indicate that there was little sign of a wage price spiral despite still high levels of vacancies. If anything, we are now starting to see in the current earnings season reports that the big tech companies are letting people go in their thousands. Amazon for example has announced the loss of over 10k jobs worldwide with more to come, while Meta recently announced 11k. Twitter has also seen people leave the business, some of them voluntarily because they don’t want to work for new owner Elon Musk. While not all these job losses are likely to be in the US there does appear to be a trend starting to build, although it is likely to take some time to filter through given that vacancy rates are still high. It’s also important to remember hiring trends tend to pick up in the lead up to Thanksgiving and the Christmas period on the back of temporary hires. Expectations for November payrolls is for 200k, down from 261k, which would be the lowest number this year. The unemployment rate is expected to tick higher to 3.8%, by virtue of a higher participation rate, while wage growth is forecast to remain subdued at 4.7%
  2. EU CPI (Nov) – 30/11 – there is increasing evidence that we might be getting close to peak inflation if the direction of travel of energy prices is any guide. Thus far in Europe we’ve seen little evidence of that with headline CPI jumping to 10.6% in October, up from 10% in September. In October we saw a sudden drop in German PPI numbers on a monthly basis by -4.2%, pulling the annualised number down from a record high of 45.8% to 34.5%. If this is indeed a leading indicator for headline CPI, and the weather doesn’t get too cold in the coming weeks then there is a chance that while the headline numbers could well remain high for some time, they could start to slowly fall back. Core prices are over half the level of the headline numbers at 5%, and with the ECB increasingly concerned about tightening too aggressively, some signs of softer CPI could well offer a compelling narrative for the ECB to hike by 50bps or even less when they meet next week.    
  3. US PCE Core Deflator (Oct) – 01/12 – there’s been little evidence thus far that US consumer spending is showing signs of slowing, while the Fed’s preferred measure of inflation, the PCE Core Deflator has thus far continued to edge higher. With core prices still showing underlying resilience there is little incentive the Federal Reserve to hold back from its currently hawkish monetary policy posture. This is despite headline CPI peaking at 9.1% In June. In September PCE Core Deflator edged up to 5.1% from 4.9% in August, although it is still below its February peaks of 5.4%. Nonetheless if we start to see signs that we are starting to turn lower then we could well see the US dollar come under further pressure building on the recent declines that we’ve seen since the peaks of late September.
  4. easyJet FY22 – 29/11 – 2022 was supposed to be the year that the UK travel sector saw a semblance of a return to normal service after the disruption caused by Covid. If only life was so simple with rising energy prices caused by the Russian invasion of Ukraine, as well as large scale travel disruption through the summer months, which prompted widespread cancellations and delays and timetable recalibrations. It is true that the aviation sector has had to deal with a myriad of challenges however some of these have been self-inflicted. Letting too many people go when lockdowns cut off their revenue flow, as well as industrial action has meant a summer of long delays, cancellations and excessive waits for luggage for some travellers. In October the easyJet share price hit ten-year lows and while we’ve seen a modest recovery since then the airline is still expected to post a full year loss of between £170m and £190m, which includes incremental disruption costs of £75m, mainly from the operational issues experienced in Q3, and FX costs of £64m. In Q4 easyJet operated at 88% of its 2019 capacity which was below expectations of 90%, while revenue is expected to increase to £2.5bn, with full year revenue expected to rise to £5.77bn. Fuel costs for H1 are 69% hedged, up from 60% hedged at the end of Q3 with the airline saying it expects to fly around 20m seats in Q1 of 2023, a 30% increase year om year, and back to pre-pandemic levels. Let’s hope they do, given that recent experience has shown that they can barely cope with their current capacity at some airports. Late flight departures and then up to 3-hour delays of bags at Gatwick Airport, has been a common experience with no staff around to deal with irate passengers. easyJet said in its Q4 update that they wouldn’t be recommending the payment of a dividend.
  5. Wise H1 23 – 29/11 – when Wise reported its Q2 number back in October the payments company reported that a 59% rise in revenues to £211.5m, comfortably beating expectations, while total volumes rose to £27bn. Total income for H1 is expected to be £416.1m. For the full year Wise upgraded its guidance saying it expects to see total income growth of between 55-60% helped by a 40% increase in customers to 5.5m in Q2, and its decision to raise prices to cope with rising costs. Since those numbers were announced the share price has slipped back with some arguing that the valuation is slightly elevated. In November the company announced it was launching an investment service in Singapore, as it looks to expand its footprint into new markets. At the end of October Wise obtained a £300m debt facility from Silicon Valley Bank in order to help it with its growth plans. 
  6. Snowflake Q3 23 – 30/11 – when Snowflake reported its Q2 numbers back at the end of August the shares jumped to their highest levels since April. Q2 revenues came in ahead of expectations, rising 83% to $497.2m, well above forecasts of $435m to $440m. Its biggest concern is its operating margins which appear to be weighing on its ability to generate a profit, as losses came in at $0.70c a share. For Q3 Snowflake upgraded its product revenue forecast to $500m to $505m while saying it expected to see this to rise to $1.92bn for the whole fiscal year. Snowflake has continued to grow its client base which now sits at 6,808, up from 6,322, in the previous quarter and 5,944 at the end of last year. Since then, the shares have slowly drifted back, hitting 4-month lows in October before a modest rebound.    
  7. Salesforce.com Q3 23 – 30/11 – there hasn’t been much in the way of good news for the Salesforce.com share price this year, with the shares down over 40% year to date, hitting two and a half year lows at the beginning of the month. The fiscal year got off to a good start with Q1 revenues coming in at $7.41bn with its Slack acquisition helping to fuel a 24% increase. At the time the company said it expected full year revenues to rise to $31.8bn, and even though the company also beat expectations in their Q2 numbers, the outlook for the rest of the year was guided lower. Q2 revenues came in at $7.72bn, while profits came in at $1.19c a share. For Q3 Salesforce.com said it expected revenues of $7.82bn and profits of $1.20c a share, while also downgrading its full year revenue guidance to $31bn, and profits to between $4.71 to $4.73c a share, largely due to the strength of the US dollar, which is expected to contribute to a negative $800m exchange rate effect. Operating margins are expected to remain steady at 20.4. 
  8. Kroger Q3 23 - 01/12 -  Ohio based retail chain Kroger got off to a decent start to the year, its shares hitting record highs back in April. Since those peaks the shares have slipped back, dropping to their lowest levels this year in October before seeing a modest rebound. In Q1 revenues came in at $44.6bn, while profits rose to $1.45c a share. In Q2 revenues fell back to $34.6bn, which was still a 9% increase on the same quarter a previously. Overall, the picture was positive with the group raising its full year profits guidance for the second quarter in a row from $3.90c a share to $4.0c a share mid-point, as it builds on its partnership with UK based Ocado to expand its digital delivery operation. In October Kroger announced a deal to buy Albertsons for the sum of $24.6bn in an attempt to allow the supermarket chain to better compete with Walmart, which is very much the market leader in the US. While ambitious, the deal will have to pass regulatory scrutiny given that combined, the two companies account for 13% of US grocery sales, and has already received push back from the usual suspects, over concerns it will limit competition, and force prices higher.  

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