Blowout Job Growth Globally
b'"The debate over the existence of a global recession may be missing an important inflection point in the global economic cycle: a trough in global manufacturing. While the global service sector has seen a boom post-pandemic, manufacturing activity has been slowing for over a year now and slipping into recession, based on the PMI survey of manufacturing business leaders, global exports of manufactured goods and revenue for manufacturing firms. But now, some signs have emerged that growth is returning as inventories are drawn down. Key signals to watch come from the pick-up in activity in leading industrial-driven economies like Germany and China. The China PMI and the German IFO surveys signal that we may be passing through the trough of the global manufacturing cycle. We can see this in the forward-looking expectations and components such as the ratio of new-orders-to-inventories ratios which are starting to turn up. The job market remains hot. This week the United Kingdom reported seven times the number of new jobs economists predicted for January and France reported another drop in its unemployment rate. As spring nears we may see more green shoots for the global economy, but there is a downside. The downside is that they may make it less likely central banks will stop hiking as soon or cut rates as aggressively later this year as the market expects. The stronger consumer spending, manufacturing and labor market data, are pushing policy rates up. Market continues to favor cyclical value over growth stocks as growth and policy rates rise. As we have been saying for over a year now. we think investors should stock with cyclical value stocks (low price to cash flow), rather than rate-cut beneficiaries like growthy tech stocks," says Jeffrey Kleintop.'