Daily Brief: The US Jobs Market Isn’t In Great Shape, And Just Wait Till The Country Meets Omicron…

Daily Brief: The US Jobs Market Isn’t In Great Shape, And Just Wait Till The Country Meets Omicron…

about 2 years ago3 mins

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Data out on Friday showed that the US added far fewer jobs than expected last month, and the country hasn’t even been introduced to a certain disruptive young go-getter yet.

What does this mean?

Squint hard, and there are silver linings here: the unemployment rate fell to 4.2% last month from 4.6% in October, while the proportion of people either in work or looking for it reached its highest level since March 2020. But after better-than-expected jobs numbers in October, economists had dared to dream that November would see a big uptick in new workers. It didn’t: the US added just 210,000 jobs last month – the smallest gain this year and a massive 62% less than analysts were expecting.

US jobs
Source: The New York Times

Why should I care?

The bigger picture: Will they, won’t they?

Friday’s data has put the Federal Reserve (the Fed) in a tricky spot: the central bank has been thinking about winding down its bond-buying program faster than planned, but this update might cause its confidence to waver. Not least because this data was collected before Omicron was discovered, so any damage the new variant might do to the jobs market – either through more restrictions or by discouraging people from working – is yet to come. The Fed, then, could just make matters worse if it ends up withdrawing economic support too quickly.

For markets: Don’t get distracted.

Investors are side-eyeing Omicron nervously, but the US stock market is actually staying relatively stable. There’s a more pressing concern, in that a number of popular individual stocks have seen their prices plunge recently. Just look at renowned investor Cathie Wood’s ARK Innovation ETF, which tracks a host of retail investor favorites and is down 17% more than the wider market since the start of November. Some analysts reckon this could be a sign of things to come, and that the collapse of those stocks could be just as dangerous as Omicron to the wider market.

ARK Innovation ETF
Source: The Wall Street Journal, FactSet

Keep reading for our next story...

Didi Announced It’ll Be Delisting Its Shares From The US Stock Market

Didi image

Didi announced on Friday that it’s delisting its shares from the US stock market, but the Chinese ride-hailing company already has its next destination in mind.

What does this mean?

The writing’s been on the wall for Didi almost since its initial public offering (IPO) in June – one of the biggest-ever US listings of a Chinese company. Only a few days afterwards, Chinese regulators – worried that the company might leak sensitive data – scrubbed Didi from the country’s app stores and banned it from onboarding new users. The company lost more than 30% of its average monthly users in just two months, and its stock fell over 40%.

Didi slumps

But regulators weren’t finished, telling Didi in late November to delist its shares from the US stock market altogether. Now, the downtrodden company has finally admitted defeat: it announced it would remove its stock from the New York Stock Exchange and list in Hong Kong instead.

Why should I care?

The bigger picture: Hong Kong is in for a good 2022.

Didi’s plan will be music to Hong Kong’s ears: the country’s stock exchange has been falling out of favor recently, with data out on Friday showing that it’s raised 20% less from IPOs this year than last. That might all change in 2022: Goldman Sachs has said that over half its Chinese clients who wanted to list in the US are now eyeing up Hong Kong, as they scramble to circumvent China’s tight restrictions on foreign listings.

Hong Kong new listings
Source: The Wall Street Journal

Zooming out: SoftBank’s bad choices.

The 14% jump in Didi’s share price after the announcement was a much-needed win for SoftBank. The Japanese conglomerate – which owns around 20% of the company – had a tough week: its $40 billion sale of British chip designer Arm to Nvidia was just blocked by regulators, and Grab – the Singaporean ride-hailing firm in which SoftBank has a 19% stake – saw its share price fall 20% after it hit the US stock market.

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