Investors will have little time to ease back into the swing of things with a full slate of labour market data to digest. The week’s main event will be Friday’s employment report for December; however, given the absence of Fedspeak since the December FOMC meeting, Wednesday’s minutes from that meeting will also be a keen policy plot developer.

After an ugly 2022, catalyzed by hyperinflation and a war on NATO’s doorstep, its only fitting stocks are struggling for traction out of New Year gates, given neither of the two adverse drivers in 2022 has been resolved.

And with the inflation baton passed to services, a segment of the economy that history suggests is much tougher to wring out of the system. Hence, it may not be a “stretch call” to assume headline, especially core inflation trends, to remain far north of 3% by the end of 2023, simply too high for central bank comfort.

With investors likely to be saturated by non-stop streams of recession news, Q1 2023 is unlikely to be a bountiful environment for index huggers.


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Despite the green shoots in China mobility tracking, December PMIs came in significantly below expectations, and the government’s latest tourism data remains depressed. Hence a slower reopening but accelerated Q2 demand with consistently pro-growth policy messages could see oil markets continue to trade in a fitful manner over the short term.

Conclusion? We may need to wait for economic data to turn more favourable in China before we take out Brent $90 per barrel.

Europe’s gas prices have slumped as inventories are now very high for the time of year, and traders have concluded Europe energy crisis is over. And this naturally will take some upward heat off oil markets.

Published by Stephen Innes, Managing Partner, SPI ASSET MANAGEMENT