Finimize - 🥷 Time to get tactical

Hi Reader, here's what you need to know for February 6th in 3:13 minutes.

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Today's big stories

The US added more jobs than expected – and much more than the Fed wanted
Here’s how to navigate markets with tactical investing – Read Now
The IMF called on the Chinese government to up its economic game

And Then I Found A Job

What’s Going On Here?

Fresh data out on Friday showed that the US added more jobs than expected last month – and heaven knows… ah, you know the rest.

What Does This Mean?

It seemed like the Federal Reserve (the Fed) had put the kibosh on the hot-to-trot labor market, with job growth slowing down for 5 months in a row – but Friday’s data showed that the market still had some fight in it. The US economy added a huge 517,000 jobs last month, way more than the 188,000 the eggheads were expecting, notching up the biggest gain since last July (tweet this). Plus, with the unemployment rate hitting 3.4% – the lowest since groovy ol’ 1969 – and demand for workers still lively, companies have nearly twice as many job openings as there are workers available. With competition like that, it’s no wonder wages grew faster than expected compared to the same time last year.

Why Should I Care?

For markets: Not-so-soft landing.
This data will throw a wrench in the works for the Fed, which made its interest rate hikes a little gentler just last week. See, the Fed’s hoping for a “soft landing”, a win-win scenario where inflation slips without hitting employment and the economy too hard. But to make that happen, the central bank’s made it clear that wage growth needs to play ball – something that isn’t panning out right now. That’s got traders betting the Fed will have to extend its hike run, which might be why US stock markets took a tumble after the news.

The bigger picture: All fired up.
This news suggests that tech companies' mass layoffs are the exception rather than the rule – but those cost-cutting firings have won investors’ admiration. Since their job-cutting sprees, Amazon, Meta, Alphabet, and Microsoft have managed to add a combined $800 billion to their market value. That’s probably cold comfort for their axed employees though…

You might also like: These three indicators suggest stocks could be ready for a breakout.

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Analyst Take

Tactical Investing Could Be The Weapon You Need For Today’s Markets

By Luke Suddards, Analyst

When markets are changing as quickly as your TikTok feed, you might want to consider some tactical investing.

See, this style of trading allows you to be agile, adjusting and rebalancing your allocations based on what’s going on in different assets.

That’s today’s Insight: how to navigate markets with tactical investing.

Read or listen to the Insight here

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London’s lovely this time of year

After many dismal months of (stereotypically) gray outlooks, the UK’s finally caught a sunbreak.

Winter was unseasonably kind on Europe, and the region’s relatively modest use of energy has led to a sharp drop in European natural gas prices. Energy bills, then, could start deflating soon.

Inflation has also started slowing down in the UK, and the Bank of England’s governor revealed that the country could see another “rapid fall” when energy costs take a breather.

That could all be good news for British stocks: the country’s key stock index – the FTSE 100 – has been holding up well, it’s true, but it’s still tricky to spot the future winners.

IG, though, has just shared a goldmine: here are IG’s top FTSE 100 dividend stock picks right now.

Find Out More

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