Companies Keep Hiring Despite Their Fears That A Downturn Is Coming

 

"A lot of businesses are feeling morose about where the economy is heading. And yet they still are looking to hire more workers.

The Labor Department on Wednesday reported that there were a seasonally adjusted 10.5 million unfilled job openings in the U.S. as of the last day of November, about equal to the upwardly revised count for October. That was down from the extremes hit earlier last year, but still far above anything seen during the prepandemic period.

As for the job cuts announced in November by big companies such as Amazon.com, Twitter and Facebook parent Meta Platforms, they still aren't making much of a dent in the overall job market.

There were a seasonally adjusted 1.4 million layoffs and discharges in November. That was about even with October and up just a bit from November 2021's 1.3 million. In the year before the pandemic, when the job market was plenty strong, there was an average of about 1.8 million layoffs a month. Moreover, Wednesday's report showed that the number of workers quitting their jobs in November remained elevated -- an indication that people are finding job opportunities elsewhere.

Contrast the job openings report with the Institute for Supply Management's monthly manufacturing report, which also came out Wednesday. The ISM's index of manufacturing activity came in at 48.4 for December, down from November's 49. Anything below 50 indicates factory output is contracting. But an employment subindex within the report rose to 51.4 last month from 48.4 -- an indication that even as manufacturers became gloomier, they stepped up hiring.

It isn't just manufacturers who are feeling pessimistic. The Business Roundtable's index of optimism among chief executives registered continued deterioration in the fourth quarter. A quarterly survey conducted by Duke University, the Federal Reserve Bank of Atlanta and the Federal Reserve Bank of Richmond showed that chief financial officers were similarly downbeat.

Perhaps it is just a matter of time before the job market catches up with the dour predictions emanating from corner offices -- and clearly the more the Fed raises rates this year, the harder it will be for the economy to keep generating jobs.

But it could also be that the big companies that tend to dominate surveys are providing an incomplete picture of the job market. Public companies are more geared toward producing and selling goods than the economy at large, which is more service-oriented, and additionally have watched their share prices slide sharply over the past year. Jefferies economists point out that businesses with fewer than 250 employees accounted for a record 78.4% of private-sector job openings in November.

Regardless of the reason, for now at least the job market looks strong. A recession might be coming in 2023, but it sure hasn't started yet." [1]

1. Companies Keep Hiring Despite Their Fears That A Downturn Is Coming
Lahart, Justin.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 05 Jan 2023: B.12.   
   
 

2022 m. ekonomikos tendencijos pasikeitė, sukeldamos klausimų, ar mes visam laikui esame naujo investicinio portfelio režime

"Po pasaulinės finansų krizės tektoniniai pokyčiai pasaulio ekonomikoje lėmė, kad beveik kiekviena turto klasė daugiausia pakilo. Tada pernai portfelio planas buvo priešingas: parduokite viską. 2023 m. pirmą kartą per dešimtmetį ir pusės, investuotojai turi daryti dideles prielaidas apie pasaulį.

 

     Nors S&P 500 indeksas 2022 m. smuktelėjo 19%, antrąjį pusmetį jis prekiavo į šoną. Per šį laikotarpį dauguma analitikų sutiko, kad infliacija, greičiausiai, pasiekė aukščiausią tašką, tačiau per pirmuosius du 2023 m. ketvirčius turtingose šalyse bus nuosmukis, nors ir švelnus. Tai nėra linksmas sutarimas, tačiau jis siūlo aiškią investavimo strategiją. Jei nuosmukio akivaizdoje centrinio banko posūkis yra arti, obligacijų pirkimas yra prasmingas. Dauguma didžiųjų brokerių mano, kad 10 metų iždo pajamingumas 2023 m. baigsis žemiau dabartinio 3,9 % lygio. Akcijos gali būti įtrauktos, kai ekonomika atsigaus vėliau šiais metais.

 

     Galima teigti, kad taupytojai turėtų mažiau rūpintis ateinančiais 12 mėnesių, nei kitais 12 metų. Čia tampa sunku: spėlioti apie ilgalaikę perspektyvą retai kada buvo sunkiau, nei dabar.

 

     Praėję metai buvo sparčios perėjimo nuo pakilimo prie žlugimo, nepastovių kainų ir agresyvaus pinigų politikos griežtinimo centrinių bankų metai. Tai visiškai priešinga laikotarpiui, prasidėjusiam 2008 m. – galbūt net 1990-aisiais – kai buvo lėtas, bet stabilus augimas ir infliacija bei itin žemos palūkanų normos. Ar praėjusieji metai buvo tik trumpas pertraukimas, ar naujos pasaulietinės tendencijos, perrašančios investicijų planą, pradžia?

 

     Šiuo atveju Volstryto profesionalai sutaria kur kas mažiau, kaip rodo daugiau, nei 40 metinių perspektyvų, kurias iki metų pabaigos brokeriai ir turto valdytojai išsiuntė klientams, analizė. Paimkite  ilgalaikę infliaciją – diskusijų tašką: tų, kurie mano, kad bus sunku grįžti į ikipandeminį lygį, yra dauguma, bet tik 56 proc.

 

     Didžiausias pasaulyje investicijų valdytojas „BlackRock“ mano, kad pasaulyje yra nauja tvarka. Jis perspėjo, kad „tikimės, kad infliacija atvės, bet išliks aukštesnė, nei centrinio banko tikslai – 2 procentai“.

 

     Yra du dideli argumentai, patvirtinantys šią pasaulėžiūrą. Pirmasis, kuriam pritarė britų ekonomistas Charlesas Goodhartas, yra tai, kad dėl laipsniško gyventojų senėjimo mažėja darbo jėgos, todėl didėja darbo jėgos derybinė galia. Kinijos darbuotojų integracija į pasaulio ekonomiką pristabdė šią tendenciją, tačiau vieno vaiko politika dabar paskatino ir ten demografinį pasikeitimą. Antrasis susijęs su disciplinuojančiu globalizacijos poveikiu darbo poreikiams ir parduodamų prekių bei paslaugų kainoms. Pasaulis grįžta į ekonominius ir finansinius blokus, kuriuos gali paspartinti neseniai paskelbtos sankcijos Rusijai.

 

     Jei tai tiesa, obligacijos yra daug mažiau patrauklios ilgalaikiams investuotojams. Dar blogiau, jos gali nebeveikti kaip pagalvėlės akcijų išpardavimų metu, o tai reiškia nuolatinį visur esančio „60/40“ portfelio nykimą. Investuotojai turėtų rinktis su infliacija susietą popierių ir žaliavas, ir rinktis pigių arba „vertingų“ sektorių akcijas, kurių pajamos yra nuspėjamos. Atstovaujanti įmonė būtų telekomunikacijų konglomeratas „Verizon Communications“.

 

     Nors metinės perspektyvos, aiškiai numatančios visišką grįžimą prie iki 2020 m. buvusių tendencijų, yra rečiausiai paplitusios, tokia nuomonė taip pat turi šalininkų – galbūt, daugiau, nei rodo pardavimo pusės rekomendacijos: ilgalaikių infliacijos lūkesčių rinkos priemonės išliko ribotos.

 

     Pavyzdžiui, Šveicarijos bankas UBS pataria klientams lažintis dėl deinfliacijos ir investuoti pinigus į pastarųjų dviejų dešimtmečių laimėtojus, įskaitant ilgalaikes obligacijas ir „augimo“ akcijas, tokias, kaip technologijų milžinė „Netflix“. UBS ekonomistai pabrėžia, kad globalizacija sumažino infliaciją tik maždaug 0,16 procentinio punkto per metus ir, remiantis įmonių pranešimais iki šiol, gamyba bus perkelta tik nedideliu mastu.

 

     Be to, duomenys nepatvirtina tariamo senėjimo ir didesnės infliacijos ryšio – daugelis teoretikų netgi mano, kad senėjimas turėtų ją sumažinti. Paprasčiau yra tai, kad mažėjantis profesinių sąjungų skaičius Vakarų šalyse susilpnino darbuotojų derybinę galią ir kad ši infliaciją mažinanti jėga išlieka. JAV 12 % darbuotojų priklauso profesinėms sąjungoms, palyginti su 21 % 1983 m. Tačiau net ir tai yra sudėtinga, nes atlyginimų kilimas yra prastas infliacijos paaiškinimas: koreliacija stipri tik tais laikotarpiais, kai infliacija yra didelė dėl tokių priežasčių, kaip prekių šokas 2022 m.

 

     Investuotojai gali pasirinkti savo poziciją didelėse filosofinėse diskusijose, turinčiose įtakos rinkoms. Jie tiesiog nebegali jų ignoruoti“ [1]

 

1. Investors Need an Inner Philosopher --- Economic trends were upended in 2022, sparking questions whether we are permanently in a new portfolio regime
Sindreu, Jon.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 05 Jan 2023: B.12.

Economic trends were upended in 2022, sparking questions whether we are permanently in a new investment portfolio regime

"After the global financial crisis, tectonic shifts in the global economy meant that almost every asset class mostly went up. Then last year, the portfolio playbook was the simple opposite: Sell everything. In 2023, for the first time in a decade and a half, investors need to make big assumptions about the world.

Though the S&P 500 index ended 2022 with a 19% fall, it traded sideways during the second half. During this period, most analysts came to agree that inflation has likely peaked, but that there will be a recession in rich nations during the first two quarters of 2023 -- albeit a mild one. It isn't a cheerful consensus, but it does offer a clear investment strategy. If a central-bank pivot in the face of a downturn is nigh, then buying bonds makes sense. Most big brokers believe 10-year Treasury yields will end 2023 below their current 3.9% level. Equities can be added as the economy rebounds later in the year.

Arguably, savers should care less about the next 12 months than the next 12 years. This is where it gets tough: Making guesses about the longer term has rarely been harder than it is right now.

Last year was a year of rapid shift from boom to bust, volatile prices and central bankers aggressively tightening monetary policy. This is the polar opposite of the period that started in 2008 -- perhaps even in the 1990s -- which involved subdued but stable growth and inflation, and ultralow interest rates. Was last year just a brief interruption, or the start of a new secular trend that rewrites the investment playbook?

Here, Wall Street professionals are far less in agreement, as suggested by an analysis of more than 40 annual outlooks sent by brokers and asset managers to clients by year-end. Take long-term inflation, a measure at the nub of the debate: Those who think it will be hard to bring back to prepandemic levels are in the majority, but by a narrow 56%.

BlackRock, the world's largest investment manager, believes the world is in a new regime. It warned that "we expect inflation to cool but stay persistently higher than central bank targets of 2%."

There are two big arguments supporting this worldview. The first, endorsed by British economist Charles Goodhart, is that a progressively aging population shrinks workforces, increasing labor's bargaining power. The integration of Chinese workers into the global economy paused this trend, but one-child policies have now precipitated a demographic reversal there as well. The second involves the disciplining effect of globalization on labor demands and the prices of tradable goods and services. The world is reverting back to economic and financial blocs, which the recent sanctions on Russia could accelerate.

If true, then bonds are far less attractive for long-term investors. Worse, they may no longer act as cushions during equity selloffs, spelling the continuing demise of the ubiquitous "60/40 portfolio." Investors should opt for inflation-linked paper and commodities, and choose stocks in cheap or "value" sectors with predictable earnings. A representative firm would be telecommunications conglomerate Verizon Communications.

Though annual outlooks explicitly predicting a full return to pre-2020 trends are the least common, this view has proponents too -- perhaps more than sell-side recommendations suggest: Market measures of long-term inflation expectations have remained contained.

Swiss bank UBS, for example, is advising clients to bet on disinflation and put money on the winners of the past two decades, including long-maturity bonds and "growth" stocks like technology giant Netflix. UBS economists underscore that globalization is found to have compressed inflation by only around 0.16 percentage point a year and that based on corporate announcements so far, reshoring of production will happen at only a small scale.

Also, the data doesn't bear out the alleged link between aging and higher inflation -- many theorists even believe aging should lower it. More straightforward is that declining unionization rates across Western nations have weakened workers' bargaining power, and that this disinflationary force remains in place. In the U.S., 12% of workers are unionized, compared with 21% in 1983. But even this is complicated because pay rises are a poor explanation for inflation: The correlation is strong only in periods when inflation is high, for reasons such as the commodity shock in 2022.

Investors can choose where they stand in the big philosophical debates affecting markets. They just can't ignore them anymore." [1]

1. Investors Need an Inner Philosopher --- Economic trends were upended in 2022, sparking questions whether we are permanently in a new portfolio regime
Sindreu, Jon.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 05 Jan 2023: B.12.