Market Radar 10. April 2023

Easter baskets and marshmallows

Labor market data without big surprises, or maybe?
New US jobs data were released on Good Friday.

Outside of agriculture, 236,000 net and seasonally adjusted new jobs were created, slightly exceeding expectations of 230,000 new jobs.
The unemployment rate fell to 3.5% in March from 3.6% in February. At 3.4%, the lowest level since May 1969 was reached in January.

The US labor market thus remains robust.
If the labor market data remain stable in the coming months, this should give a boost to the stock markets.
The US stock futures rose accordingly in an initial reaction to the labor market data on Good Friday, so that we can expect an up-gap for Easter Monday.
In the S&P 500 (SPY) ETF, the next horizontal resistances are lurking around $412, $416 and $426. If these are overcome in one run, prices close to 440 US dollars in the SPY ETF could still be reached in the second quarter.

The US labor market thus remains robust.
If the labor market data remain stable in the coming months, this should give a boost to the stock markets.
The US stock futures rose accordingly in an initial reaction to the labor market data on Good Friday, so that we can expect an up-gap for Easter Monday.
In the S&P 500 (SPY) ETF, the next horizontal resistances are lurking around $412, $416 and $426. If these are overcome in one run, prices close to 440 US dollars in the SPY ETF could still be reached in the second quarter.

Some economists wonder why the unemployment rate is not rising, even though we hear about job cuts at large companies almost every day; this is of course announced by CEOs in the belief that such a move will support the share price – especially at a time when a recession is not only looming, but also showing in the economic data.

Currently, however, the recession can only be forecast from the data, not read off.
It looks as if the job cuts that have been announced and partly already carried out by large Internet and technology companies such as Meta Platforms, Alphabet or Tesla for a few months are not really having an impact on the labor market data. Why is that ?

It may not be difficult for well-trained programmers who have lost their jobs to find jobs elsewhere in the US. Perhaps the layoffs will give the start-up market a breath of fresh air, because well-trained, creative software experts can finally implement their own ideas, which fell on deaf ears among decision-makers within the ramified apparatus of a tech colossus.

The production boost that is now being uncovered by the AI will also help new business ideas in areas such as digital marketing or content management to shoot up like mushrooms. A lot of things that were hardly conceivable before November 2022, even for people with an affinity for IT – and that seemed tedious in terms of process structure – could possibly be set up in a short time on the breeding ground of AI. And be it just an app connected to Adobe Firefly that enables children to have their own stuffed animal painted using an AI, and then have this picture commissioned by the parents, so that a soft teddy bear to cuddle in the children’s room is sent by post – the idea already exists, by the way, but as far as I know it has not yet been generated by AI: The US-listed company Build-a-Bear Workshop (BBW; market capitalization: 350 million US dollars) offered at Easter in addition to the usual teddy bears, that children (and not the AI !) can design and “design” individually on the computer using templates, also offers small rabbits for Easter baskets that smell like marshmallows – according to the company’s press release, 250,000 of these have already been delivered. Shareholders found an Easter egg in their bank statement on Maundy Thursday in the form of a special dividend of $1.50 per Build-a-Bear Workshop share, a dividend yield of 6.32% at a share price of $23.74. . Incidentally, before Easter, the BBW share was around 10% below its all-time high.