Prepare to pay more tax whoever wins the election
Taxpayers face a struggle to balance their finances as fiscal screw tightens
As Britain gears up for the party political conference season and next year’s general election, voters have some big questions to consider.
Not the least important for many is: what will happen to personal taxes?
The Labour party, riding high in the polls, last week sought to woo well-off voters by promising that an incoming Labour government would not hammer the wealthy. Rachel Reeves, the shadow chancellor, said Labour had “no plans for a wealth tax” and ruled out higher levies on capital gains and property income.
Meanwhile, prime minister Rishi Sunak is under pressure within his party to make tax a key dividing line with Labour. Conservative MPs have called for tax cuts to be announced before the election, with the abolition of inheritance tax touted by some as a potential vote winner.
But sluggish economic growth, high inflation and the shock of the pandemic have worsened the public finances — leading some economists to sound the alarm about Britain’s soaring debt bill. These cold hard facts leave little room for manoeuvre for any government as the Institute for Fiscal Studies argued in a recent report on the long-term health of the nation’s tax system.
“Unless something major changes — such as an acceleration in economic growth — it will not be possible to maintain public services and keep tax at current levels. The choices that face future governments are not enviable,” says the IFS.
FT Money assesses the difficult outlook for tax and asks what people can do to safeguard their personal finances in the face of a tax burden that is almost certain to increase.
Political promises
A straw poll of FT readers shows widespread concern. As one contributor, Joel Bhatt, wrote: “I don’t think we can balance the books without reducing the government’s commitments and simultaneously increasing taxes.”
Advisers also report their clients are worried, both about the general tax outlook and the plans emerging from the Tories and Labour alike.
Nimesh Shah, chief executive of accountancy firm, Blick Rothenberg, said: “People are anxious about what the Conservatives are going to do with their pre-election Budget, in terms of the promises they will make, and people are anxious, very anxious, about Labour and some of the policies that are being talked about.”
He added that Reeves’ pledge last week not to raise taxes on wealth, capital or property income had failed to completely reassure his clients, with many sceptical that the comments were “purely political positioning to pre-empt the inevitable attack from the Conservatives that a Labour government will unleash a ‘tax bombshell’”.
Michelle Denny-West, a tax partner with another accountancy firm Moore Kingston Smith, said that while Reeves’ comments said what “will not be done” by a potential Labour government, they said “little about what will be done”.
Manifestos are still being written but some specific pledges have already been made. These include Labour’s promise to abolish the non-domicile regime and use the tax raised to increase recruitment and training of NHS staff, as well as boost spending on school breakfast clubs. The party has said a future Labour government would replace the non-dom regime with a “clear, simple, and modern system” for people living in the UK for short periods.
It has also pledged to levy VAT on private school fees, saying the money would be used to increase state school spending. The party also plans to end a tax break used by private equity executives to reduce taxes paid on their share of profits, known as carried interest.
Meanwhile, Jeremy Hunt, the chancellor, has ruled out big pre-election tax cuts this autumn. He told the Financial Times recently that he must “double down” on inflation and would not “pump billions of pounds of additional demand” into the economy.
Moreover, the scope to do anything big has been curtailed by last autumn’s “mini Budget” which triggered mayhem in financial markets after the then chancellor’s debt-fuelled tax-cutting plans surprised investors.
Dawn Register, head of tax dispute resolution at BDO, says: “The learning from the mini Budget will last for a generation. You can’t see any chancellor doing something wild.”
Tax cuts or tax rises?
While future Tory tax cuts may or may not materialise, the Conservative government’s record so far has been to raise the tax burden to the highest since the 1940s.
UK tax revenue is forecast to total £950bn in 2023-24, equivalent to 36.9 per cent of gross domestic product, estimates the IFS. Under current government plans, tax revenue is forecast to rise to 37.7 per cent of GDP by 2027-28, which would be the largest share of national income taken in tax since at least 1948. And that is without any extra levies from Labour.
The increased take is mostly effected via “stealth” taxes — notably the freezing of allowances and thresholds at which tax is paid — from April 2022 to 2028.
This “fiscal drag” approach is especially potent at a time of higher inflation, as nominal earnings go up, taking more people across thresholds even if their real incomes are flat or falling.
In the November 2022 Budget, the chancellor also cut the threshold at which the 45 per cent additional income tax rate hits earners from £150,000 to £125,140, with effect from April 2023.
Overall, this process will see 2.5mn more taxpayers brought into the higher and additional rates of income tax by 2027-28, according to the IFS. That’s 2.1mn more paying higher-rate tax — a projected total of 7.8mn. And 400,000 more people will pay additional-rate tax, or 1.7mn altogether.
The government’s decision to freeze the inheritance tax exemption, known as the nil-rate band, since 2009 has already boosted tax receipts. Britons paid record inheritance tax of £5.76bn in 2020-21, up from £2.7bn in 2010-11.
There were also record capital gains tax receipts of £16.7bn in 2021-22, driven by rising asset values and a significant cut in entrepreneurs’ relief.
Now, drastic reductions in the dividends and CGT allowances will squeeze people’s finances in the years ahead. The dividend allowance halved from £2,000 to £1,000 this April, and will halve again to £500 in April 2024. The CGT allowance was cut from £12,300 to £6,000 this April and will be cut again to £3,000 next spring.
“The big issue is the fiscal drag and that is hard [to do anything about]. The impact of that on such a wide reach of population is massive,” says Register.
She warns that the government is also due a big boost from January because more people will pay tax on savings after interest rates climbed.
Basic rate taxpayers can earn up to £1,000 tax-free in interest from their savings. This falls to £500 for higher rate taxpayers, while additional rate taxpayers have no allowance at all and therefore pay tax on all their interest.
Both main political parties are happy to keep the electorate guessing on capital gains taxes, according to Chris Etherington, partner at accountancy firm RSM. He says that speculation that CGT might go up has prompted people to crystallise gains.
“The Conservatives have . . . done nothing to dispel those rumours and they’ve ended up with bumper tax receipts,” he explains. “If Labour were to get into power and continue with the line that they have ‘no plans’ to raise CGT, it’s not a categorical no . . . People will fill in the gaps themselves and you could end up with bumper tax receipts without doing anything.”
Most advisers predict there is almost no chance of cuts in overall taxes after the next general election and every prospect of increases. “Any government is going to have to grapple with tax and how we fill the coffers,” said Julia Cox, partner at law firm Charles Russell Speechlys.
IFS tax experts offer taxpayers a crumb of comfort, pointing out that tax rises are not a certainty since decisions will depend ultimately on what voters want. But lower taxes would come at a heavy price.
“It is not inevitable that taxes will rise — UK voters have a choice. But the choice is harder than it has been for decades. Without tax rises, UK public service and benefits provision will not simply tread water, it will deteriorate.”
What can you do to protect your finances?
There is little one can do to temper the impact of fiscal drag. As Denny-West of Moore Kingston Smith says: “It’s a very clever tax rise.”
Meanwhile, the uncertainty about the post-election tax outlook makes planning hard. Advisers generally caution against accelerating decisions based on speculation. “Crystal ball gazing” is “dangerous” warns Register.
People should concentrate on the basics — taking advantage of existing allowances and maximising Individual Savings Accounts (Isas) and pensions, as well as gift aid, several advisers told FT Money. Spouses can divide their financial assets better between them to maximise their allowances, including on bank interest.
Many more people might need to file a tax return for the first time if earned bank interest takes them above their personal savings allowance. They should register for a self-assessment tax return, to inform HM Revenue & Customs they have tax to pay, by October 5.
Non-doms would be well advised to look at their options now, given the clarity of Labour’s intentions. David Lesperance, founder and principal of international tax advice firm Lesperance & Associates, says he is seeing many more non-doms considering whether they should stay in the UK or move. He likened the necessary contingency planning to having a “fire escape plan” if the “worst were to happen and a wildfire hits your house”.
Shah says Labour, in particular, should be careful not push wealth out of the country. “People are really nervy about what the tax system is going to look like.”
Stocks in Asia rose and metals rallied as China ramped up stimulus to aid its ailing economy, while traders awaited Friday’s jobs reading to gauge the Federal Reserve’s policy outlook. The MSCI Asia Pacific Index was headed for a second straight week of gains, the longest such streak since mid-June. Mainland China shares climbed after closing the month over 5% lower, with energy, financial and property stocks among the best performers. US stock futures edged higher, while Hong Kong’s market is shut on what may be the strongest storm to hit the city in at least five years. Aluminum and copper were up as metals looked set to extend this week’s advances. The yuan strengthened against the greenback after China’s central bank reduced the foreign exchange reserve requirement ratio for financial institutions in a bid to support the currency. The currency has since pared its gains. Investors also welcomed moves by the government to allow the nation’s largest cities to cut down payments for home buyers and encouraged lenders to lower rates on existing mortgages as well as on deposits. Bank of China Ltd. and several other major lenders followed through by lowering deposit rates. Sentiment was further buoyed by an unexpected rise in manufacturing data that advanced to 51 in August, the highest reading since February, according to a Caixin survey. The picture was also rosy in Japan after data earlier showed companies’ profits rose 11.6% on an annual basis in the second quarter. The Topix index posted its eight consecutive month of increase in August — the longest winning streak since 2013 — and the gauge was now set for the best weekly advance since October. The 10-year yield had extended its retreat Thursday after recently hitting levels last seen in 2007 while an index of dollar strength had its best month since February. Treasuries steadied during Asian trading, while the dollar was little changed. As the property easing measures and the FX RRR cut were announced before the market opened, “there could be some element of that timing being used to help sustain China assets especially with the PMIs giving some positive signals,” said Eddie Cheung, senior emerging market strategist at Credit Agricole CIB in Hong Kong. Fed Bank of Atlanta President Raphael Bostic said policymakers need to be cautious not to overtighten monetary policy and risk unnecessary harm to the US labor market. Oil is set for a weekly gain after Russia signaled that it would extend export curbs and US inventories dropped further. Gold headed for the second weekly advance. US After Hours NTNX +15.1%, ESTC +9.6%, DELL +7.7%, MDB +5%, LULU +1.8% higher on earnings; PD -5.2%, AVGO -4.2% lower on earnings; EOSE +52.3% pops on expansion program.
Nikkei +0,46% Hang Seng -0,55% CSI +0,55% Shanghai +0,27% Shenzen +0,18%
Eur$ 1,0845 CNH 7,2683 CNY 7,2642 JPY 145,59 GBP 1,2666 CHF 0,8835 RUB 95,7031 TRY 26,7133 WTI$ 83,83 Gold 1940 BTC 26,040 ETH 1,649
S&P +0,11% Nasdaq +0,04% EuroStoxx +0,07% FTSE +0,14% Dax +0,05% SMI +0,04%
Macro :
- Morgan Stanley Strategists See Europe Equity Yield as Attractive
- CAC Index Falters with Mixed Macro, 18% Asia Exposure
- New Rising Stars Are Powering Gulf’s $50 Billion Spending Spree
- US Providing $12 Billion to Retrofit Auto Plants for EVs
- Russia Blocks Renewal of UN Sanctions in Mali
- EU Bank €84 Billion Revenue Upgrades Face 2024 Unwind: BI Focus
- Russia Agrees on Further OPEC+ Oil-Export Cuts, Novak Says
Keep an eye on :
Keep an eye on :
- AMX US : Millennium Management Built Short Position in America Movil: FT
- NDA GY : Aurubis Won’t Meet Year Pretax Operating Profit Forecast
- NDA GY : Copper Giant Aurubis Says It Is Victim of a Huge Metal Theft (1)
- NDA GY : Aurubis Inventory Control Raises Uncertainties: Morgan Stanley
- BAVA DC : Bavarian Nordic Sees No Commercial Opportunity for Covid Vaccine
- BIDU US : Baidu’s ChatGPT-Like App Surpasses 1 Mln Users in First 19 Hours
- BIM FP : BioMerieux 2Q Organic Sales Beats Estimates
- GLW US : Corning to Spend $1.5B to Build S. Korea Factory, Maeil Says
- 05G GY : CPI Property Group Signs New Bridge Loan, Swings to 1H Loss
- CAST SS : Sweden Landlord Castellum Sells First Bonds in 16 Months
- DELL US : Dell Technologies 2Q Total Net Revenue Beats Estimates
- DIS US : Disney Yanks ESPN Off Charter Cable Ahead of Football Season
- EOSE US : Eos Energy Climbs on $399 Million Energy Department Loan Pact
- FIE GY : Fielmann Group AG Boosts FY Sales Forecast
- INTC US : Intel’s CEO ‘Feeling Good’ About Quarterly Forecast; Stock Jumps
- JPM US : JPMorgan Found $1 Billion in Suspicious Epstein Activity: USVI
- RNO FP : French New Car Registrations Rise 24.3% in August: PFA
- SPM IM : Saipem €500m Equity-Linked Bonds Due 2029 to Pay 2.875% Coupon, Saipem 9M Share Block Trades at 1.49 Euros
- TSLA US : Tesla Slashes Model S, X Prices in China After Model 3 Refresh
- VWS DC : Vestas Is Close to Large Onshore Wind Turbine Order in US
>>> Up
* Acciona Energia Raised to Buy at Mirabaud Securities
* Ambu Raised to Hold at SEB Equities; PT 85 kroner
* Beiersdorf Raised to Overweight at JPMorgan; PT 140 euros
* Centrica Raised to Add at AlphaValue/Baader
* Equinor Raised to Equal-Weight at Morgan Stanley; PT 324 kroner
* Galp Raised to Equal-Weight at Morgan Stanley; PT 12.60 euros
* Honkarakenne Raised to Accumulate at Inderes; PT 4 euros
* Systemair Raised to Buy at DNB Markets; PT 90 kronor
* Systemair Raised to Buy at DNB Markets; PT 90 kronor
* Target Healthcare REIT Raised to Buy at Jefferies; PT 107 pence
* Vale ADRs Raised to Overweight at JPMorgan; PT $16
>>> Down
* Administer Cut to Accumulate at Inderes; PT 3.60 euros
>>> Down
* Administer Cut to Accumulate at Inderes; PT 3.60 euros
* Dino Polska Cut to Underweight at JPMorgan; PT 376 zloty
* Dollar General Cut to Hold at Loop Capital; PT $140
* Essity Cut to Underweight at JPMorgan; PT 235 kronor
* Renault Cut to Sell at UBS; PT 31 euros
* VW Cut to Sell at UBS; PT 100 euros
>>> Initiation
>>> Initiation
* C3.ai Rated New Buy at President Capital Management; PT $35.50
* Koenig & Bauer Rated New Add at Baader Helvea; PT 20 euros
* Per Aarsleff Reinstated Buy at ABG; PT 380 kroner
>>> Call
>>> Call
* Aurubis Inventory Control Raises Uncertainties: Morgan Stanley
* Koenig & Bauer New Add at Baader on Market Leading Positioning
* Morgan Stanley Strategists See Europe Equity Yield as Attractive
* European Energy Sector Is Double-Upgraded at Morgan Stanley
* Palantir Cut as Morgan Stanley Doesn’t See AI Boost Yet (2)
US should use chip leadership to enforce AI standards, DeepMind co-founder says
Mustafa Suleyman says sales of Nvidia chips that dominate artificial intelligence should be tied to safe use pledges
The US should use its leadership in semiconductors as a “chokepoint” to enforce minimum global standards for the use of artificial intelligence, according to the head of one of the country’s most ambitious AI start-ups.
Mustafa Suleyman, chief executive of Inflection and a co-founder of DeepMind, told the Financial Times in an interview that Washington should restrict sales of the Nvidia chips that play a dominant role in training advanced AI systems to buyers who agree to safe and ethical uses of the technology.
At a minimum, he added, that should mean agreeing to abide by the same undertakings that some of the leading US AI companies made to the White House in July, such as allowing external tests before releasing a new AI system.
“The US should mandate that any consumer of Nvidia chips signs up to at least the voluntary commitments — and more likely, more than that,” Suleyman said. “That would be an incredibly practical chokepoint that would allow the US to impose itself on all other actors [in AI].”
The call for greater US control of AI comes as the rapid development of the technology threatens to outrun efforts of regulators to control it. The “exponential trajectory” of AI meant that two years from now, the large language models at the centre of current AI development would be 100 times more powerful than OpenAI’s GPT-4, Suleyman said. “That justifies real action” such as the limit on chip sales, he added.
Most concerns about AI have been split between the immediate risks posed by today’s AI-powered chatbots and the long-term risk that AI systems will escape human control once they exceed the understanding of their makers, something known as superintelligence. Instead, tech executives such as Suleyman point to an intermediate period that is fast approaching, when the large language models that stand behind today’s chatbots are used in much more significant applications.
“Too much of the conversation is fixated on superintelligence, which is a huge distraction,” he said. “We should be focused on the practical near-term capabilities which are going to arise in the next 10 years [and] which I believe are reasonably predictable.”
Inflection, one of the best-funded AI start-ups, has raised $1.5bn since it was set up early last year. It has released a chatbot called Pi and is planning to build a personal assistant that can play an active role in managing its users’ lives, making it one of a number of companies racing to push AI beyond the present generation of chatbots such as ChatGPT and Google’s Bard.
In the next two or three years, adding more memory to today’s AI systems would lead to them being able to store “two or three ideas and then reason over them”, Suleyman said. Along with greater planning abilities, this could make them much better at solving real-world problems.
The extra capabilities would bring “a huge step forward that will unlock a whole suite of new applications”, he said. This included “a very coherent expert role that can co-ordinate and decide and plan and reason and use its judgment”.
Inflection is not the only company racing to extend the technology behind today’s chatbots. Google chief executive Sundar Pichai said this year that his company’s next large language model, called Gemini, would also have expanded memory and planning capabilities, giving it the wherewithal to grapple with a greater range of real-world problems.
Google this week followed OpenAI in announcing that it would link its AI systems to other software applications, enabling them to initiate actions directly. The search company highlighted relatively simple actions for the AI, such as acting on behalf of a worker by automatically booking time off in a company’s HR system, but its move lays the foundation for more complex actions.
“In future, AI is going to be participating in the economy in a material way, unlike the way that Excel participates in the economy. It’s going to be orchestrating actions using APIs,” Suleyman said, referring to the code that enables software programs to communicate with each other. “It’s going to be booking and buying and planning and organising.”
The prospect of powerful AI agents operating beyond direct human control is set to raise the stakes in the current debate over AI regulation. In a book to be published next week called The Coming Wave, Suleyman calls for a more concerted effort to anticipate and control the next generation of AI systems, starting with the tech industry taking a more active role.
“The burden of proof is increasingly going to rest on the developers of the technology,” he said. “We’ll want to evaluate what the potential consequences are rather than doing it after the fact” — unlike the “last wave of social media”, whose potential impact was not studied in advance.
He defended the commitments that seven US AI companies — including Inflection — made recently to the White House, despite criticism about their vagueness and the fact that they are only voluntary.
“Practically speaking, the odds of passing primary legislation through the US political process are very low,” Suleyman said. “It’s not very often you get the seven leading players in a new generation of tech to sign up voluntarily to a set of commitments.”
He also called for a new global institution, modelled on the Intergovernmental Panel on Climate Change, to bring more transparency to the AI systems being developed by private companies. Such an organisation could report on the state of progress in AI and act as an outside auditor of commercial systems, he said — though ultimately this would still need legislation, such as the EU’s proposed AI Act.
Many US tech executives have been wary of Brussels’ intervention in the development of AI, in particular because of a proposal that would make the developers of AI liable for how their technology is used. Suleyman, however, claimed the EU was “heading in the right direction”, adding: “We’re responsible for the quality and performance [of AI] — I think that’s the right regime.”
Pointing to the lack of progress in the US, he said: “Inaction would be the worst of all possible worlds.”
After Hours Summary: NTNX +15.1%, ESTC +9.6%, DELL +7.7%, MDB +5%, LULU +1.8% higher on earnings; PD -5.2%, AVGO -4.2% lower on earnings; EOSE +52.3% pops on expansion programAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: NTNX+15.1% (also authorizes new $350 mln share repurchase program), ESTC +9.6%, DELL+7.7%, MDB +5%, LULU +1.8%, S +1.3%, OXM +0.1%
Companies trading higher in after hours in reaction to news: EOSE +52.3% (announces $500 mln expansion program to scale annual production to 8 GWh storage capacity by 2026), ME +31% (granted new FDA clearance), QSR+1% (authorizes new $1 bln share repurchase program), LDOS +0.7% (awarded $7.9 bln U.S. Army contract), ROST +0.4% (Board Chairman stepping down), SHOP +0.3% (launches TikTok Shop integration, according to The Information), AVA +0.1% (increases rates in Idaho)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: PD -5.2%, AVGO -4.2%, HCP -4%, VMW -1.6%, IOT-1.4%
Companies trading lower in after hours in reaction to news: MLTX -10.5% (files $1 bln mixed shelf securities offering)
Laurent Chekroun Equity Sales
Makor Securities London Ltd. | Makor Group
E: LCHEKROUN@makor-cm.com
M: +41 79 350 71 09
O: +33 1 42 33 02 05
W: www.makor-group.com
This message has been sent by Makor Securities, London, part of Makor Group, which is authorised and regulated by the FCA (625054). This message is for professional clients and eligible counterparties only, not intended for "retail clients". The information contained in this message is confidential and is for the exclusive use of the intended recipient. If you receive this message in error please inform us and delete all copies of it. The information is not intended as an offer or solicitation to buy or sell any financial instrument. All comments and statements are to be considered the opinions of the author not the Company and are not intended to be relied upon. We cannot guarantee that this message or any attachments are virus free and accept no liability for any viruses or the consequences thereof. v20230124
Closing Stock Market SummaryThe market's winning streak was broken today. The market initially moved higher before upside momentum slowly dissipated. The S&P 500 and Dow Jones Industrial Average both closed with a loss near their worst levels of the day while the Nasdaq eked out a slim gain. The muted price action was due to a lack of conviction on either side of the tape.
In general, big moves were reserved for individual stocks with catalysts. Retailers Dollar General (DG 138.50, -19.16, -12.2%) and Five Below (FIVE 171.96, -10.99, -6.0%) sank after reporting quarterly results that featured below-consensus guidance. CrowdStrike (CRWD 163.03, +13.85, +9.3%) and Dow component Salesforce (CRM 221.46, +6.42, +3.0%), meanwhile, registered sizable gains after their earnings reports.
Relative strength in mega cap stocks offered a measure of support to the broader market. The Vanguard Mega Cap Growth ETF (MGK) logged a 0.1% gain while the Invesco S&P 500 Equal Weight ETF (RSP) fell 0.4% and the market-cap weighted S&P 500 fell 0.2%.
Seven of the 11 S&P 500 sectors registered a loss with health care (-1.2%) and utilities (-1.0%) showing the steepest declines. The consumer discretionary sector (+0.5%) saw the biggest gain, bolstered by a nice move in Amazon.com (AMZN 138.01, +2.94, +2.2%).
Market participants were digesting some otherwise pleasing data that corroborated the understanding that the U.S. economy is not tracking currently at a hard landing pace.
Specifically, initial jobless claims - a leading indicator -- were just 228,000 for the week ending August 26, and personal spending increased at a healthy 0.8% clip in July. The PCE Price Index and core-PCE Price Index were both up 0.2%, and although that translated into an uptick in their year-over-year readings to 3.3% and 4.2%, respectively, the news was tolerated well because that was exactly what was expected ahead of the report.
Expectations for additional rate hikes before the end of the year were little changed after this morning's data. The probability of a 25 basis points rate hike in November is 45.4% now versus 48.9% before the data, according to the CME FedWatch Tool.
On a related note, Atlanta Fed President Bostic (2024 FOMC voter) said that he feels the Fed's monetary policy is appropriately restrictive, but that doesn't mean he is in favor of easing anytime soon.
Treasuries had a muted response to this morning's data, but drew some modest selling interest during the cash session. The 2-yr note yield fell two basis points to 4.86% and the 10-yr note yield fell three basis points to 4.09%.
- Nasdaq Composite: +34.1% YTD
- S&P 500: +17.4% YTD
- Russell 2000: +8.9% YTD
- S&P Midcap 400: +7.9% YTD
- Dow Jones Industrial Average: +4.8% YTD
Reviewing today's economic data:
- Weekly Initial Claims 175K vs consensus of 235K; Last Week was revised to 232K from 230K
- Weekly Continuing Claims 160K; Last Week was revised to 1.697 mln from 1.702 mln
- The key takeaway from the report is that initial claims -- a leading indicator -- continue to run at levels that are indicative of a tight labor market that goes hand-in-hand with an economy that is definitely not in a hard-landing pattern.
- July Personal Income 0.3% vs consensus of 0.3%; June was 0.3%
- July Personal Spending 0.8% vs consensus of 0.7%; June was revised to 0.6% from 0.5%
- July PCE Prices 0.2% vs consensus of 0.2%; June was 0.2%
- July PCE Prices - Core 0.2% vs consensus of 0.2%; June was 0.2%
- The key takeaway from the report would have to be the uptick in the year-over-year inflation readings. They weren't of the eye-popping variety; however, they should catch the Fed's eye as a basis not to cut rates anytime soon.
- August Chicago PMI 48.7 vs consensus of 45.0; July was 42.8
Looking ahead to Friday, market participants will receive the following economic data:
- 8:30 ET: August Nonfarm Payrolls (consensus 175,000; prior 187,000), Nonfarm Private Payrolls (consensus 160,000; prior 172,000), Unemployment Rate (consensus 3.6%; prior 3.5%), Average Hourly Earnings (consensus 0.3%; prior 0.4%), and Average Workweek (consensus 34.3; prior 34.3)
- 9:45 ET: Final August S&P Global U.S. Manufacturing PMI (prior 47.0)
- 10:00 ET: July Construction Spending (consensus 0.6%; prior 0.5%) and August ISM Manufacturing Index (consensus 46.7%; prior 46.4%)
Laurent Chekroun Equity Sales
Makor Securities London Ltd. | Makor Group
E: LCHEKROUN@makor-cm.com
M: +41 79 350 71 09
O: +33 1 42 33 02 05
W: www.makor-group.com
This message has been sent by Makor Securities, London, part of Makor Group, which is authorised and regulated by the FCA (625054). This message is for professional clients and eligible counterparties only, not intended for "retail clients". The information contained in this message is confidential and is for the exclusive use of the intended recipient. If you receive this message in error please inform us and delete all copies of it. The information is not intended as an offer or solicitation to buy or sell any financial instrument. All comments and statements are to be considered the opinions of the author not the Company and are not intended to be relied upon. We cannot guarantee that this message or any attachments are virus free and accept no liability for any viruses or the consequences thereof. v20230124