Jobs Report Raises Interest Rates
Last Friday November 6th, the nonfarm payrolls and unemployment figures were released and showed upside positive strength. Nonfarm payrolls for the month of October increased 271,000 compared to a consensus expected figure of 185,000. The unemployment rate inched down further to 5% and this matched expectations decreasing from a 5.1% last reported in September. Additionally, Average Hourly Earnings for private nonfarm payrolls increased at a 0.4% pace compared to a consensus expectation of 0.2%. These upside surprises signaled underlying economic strength and the bond market sold off on the news as expectations for a Fed rate hike in December grew. The 10 Year Treasury bond that had been range bound for quite some time broke through the 2.3% level and traded all the way up to 2.34%. Many market participants would like to see the Federal Reserve Bank take steps to normalizing interest rates. This news may give the Fed enough bottoms up data to take the first step in December. The real potential of higher rates is being digested by the bond market and the equity markets after a strong performance month of October.
China’s Singles Day Online Sales Event Breaks Records
Much has been written about the Chinese economy and a slow transformation to a consumer driven economy. China’s slowdown over the past few years has been a major drag on global growth and one can look to the commodities market to see the damage that this slowdown has created. Last week, China released October retail sales figures and some green shoots of encouragement can be seen. Overall October Retail Sales increased 11% for the month over last year. Gold, Silver and Jewelry sales saw an uptick along with Clothing, Shoes and Hats. Cosmetics, Food and Beverage saw some deceleration. Although trends still remain unexciting and the overall economy remains challenging, these figures could be early signs of stabilization.
China hosted their annual online Singles Day Shopping event that is held on November 11th of each year after being started by Alibaba just seven years ago in 2009. Previous sales records were smashed. Chinese consumers spent a record $14.3 Billion dollars online during the 24 hours of the event and this speaks to the power and importance of this emerging economy and the Chinese consumer. A few interesting facts from the event caught my attention:
- More sales were made via mobile devices ($9.8 Billion) than were made in last year’s event in total.
- By noon time, leading online retailer Alibaba had surpassed its record sales from the year prior.
- An estimated 200 million orders were taken by Alibaba by 8:20 am.
- American retailer Costco was a big winner as were Nut Sales. Over 245 Tons of Costco’s Kirkland brand nuts were sold. In one day!
Employees work at a sorting centre of Zhongtong (ZTO) Express ahead of the Singles Day shopping festival, Chaoyang District, Beijing, November 8, 2015. (Reuters/Jason Lee)
As the holiday season approaches, we can only hope that the rest of the globe spends like the Chinese did!
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