North American markets today, Friday, viewed several hours before the 9:30 a.m. EST opening appear poised for a mixed start with the S&P 500 and Dow in the red while the NASDAQ is in the green. However, the S&P 500 is wavering at time of writing and could make it into positive territory, (though that is certainly not assured). Canadian indicators are positive.
European markets are open at time of writing and major indicators there are in the red.
Amongst currencies the Euro and Canadian dollar are down while the British pound sterling is up against the American greenback.
Amongst precious metals the safe havens of gold and silver are up.
Today’s most important statistics come with the release of the U. S. non-farm payroll numbers, currently expected to show an increase for May. The number could set the tone within which markets trade for the next month, according to Jeremy Thomson-Cook, Chief Economist at London-based payments specialist Equals Money. “Following yesterday’s stronger than expected ADP number, market expectations for the number (this morning) have elevated from around 650,000 to 675,000 with more recent estimates as high as 800,000,” he says.
This statistic represents the total number of paid workers in new jobs excluding farm, government, non-profit organizations and private homes. It’s not a perfect indicator but provides a good view of one aspect of the recovery.
However, the figures must be viewed with care. Today’s figure for May follows the April letdown when experts including the venerable Dow Jones had estimated 1 million new non-farm jobs before the Department of Labor’s Bureau of Labor Statistics announced an increase of almost 74% less at 266,000. At the same time, the original estimate for March was revised downwards from 916,000 to 770,000, although February’s figure was revised upwards to 536,000 from the original estimate of 468,000.
These and other numbers are certainly important, and many investors, advisors and analysts study them five days a week (or even six or seven days a week). However, as the smoke clears from the pandemic many individuals are taking stock of various areas of their lives: whether to resume earlier lifestyle choices, whether to return to the company office or not or even whether to return to the work force at all. For some, the stock-taking process may include a long and careful look at investments and what can be accomplished with them.
The examination has not become any more important than before the pandemic, but it is possible that more investors have become attuned to the need to undertake it as part of the larger stock-taking.
The process includes asking oneself several questions, according to Paul Bates. capital markets participant and adjunct professor (finance) at McMaster University in Hamilton.
“Which factors are most critical in your view forward? Perhaps even more important: do you know who you are in this market, in this moment?” he says.
Perhaps there is a parallel here: just as some are re-imagining their work situations, this may also be an appropriate time to re-imagine investment choices.
The so-called easy money, the advent of the special purpose acquisition companies (SPAC’s), innovations in areas such as electric vehicles, artificial intelligence, entertainment, social media and other factors have increased the number of available investment choices. “On any given day I can find opportunities that seem appealing,” Bates says. “The numbers and the risk profile seem to fit my own risk tolerance, time horizon and return objectives.”
However, those standard considerations are just the first part of the investment decision making process. The second part is not in the investment documents but within the individual’s own persona. “There are the values that I live by, be they environmental or social. What drives the innovation? What drives the purpose of the enterprise? Would I build a career at this enterprise? “he asks. It helps to consider these factors before entering the buy order. Arguably, the process changes and increases in importance with advancing years and lifestyle concerns such as medical issues and eldercare.
As the smoke clears, we have a lot to consider – inside and outside the investment portfolio.