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Money market funds have ballooned to record size | US jobs data holds a rate-hike clue |
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Hi Reader, here's what you need to know for April 7th in 3:09 minutes.

🪺 We’ve got two back-to-back public holidays here at Finimize HQ, so try not to miss us too much while we chow down on Easter eggs. Absence makes the heart grow fonder, after all – so you should be well and truly smitten by the time we hit your inbox again on April 12th.

Today's big stories

  1. Friday’s US jobs data could be a big, tantalizing clue to the Fed’s next move
  2. Our analyst broke down Microsoft’s fundamentals in just five steps – Read Now
  3. Investors are plowing cash into money market funds like there’s no tomorrow

Hike And Seek

Hike And Seek

What’s Going On Here?

Friday's US jobs data could help spy out any upcoming interest rate moves.

What Does This Mean?

The monthly jobs report is always a hot topic for economists, and that's no wonder: when businesses thrive and up their headcounts, it usually means the sun’s shining on the economy too. And lately the jobs market has been sizzling – but there's a catch: pesky wage growth that adds fuel to inflation’s fire. That's been a headache for the Federal Reserve (the Fed) in its battle against price rises. So with economists predicting that nearly 250,000 jobs were added last month, keep an eye on how Friday's real numbers stack up: they might offer an insight into the Fed's next move.

Why Should I Care?

For markets: Expecting the expected.
The labor market has shown signs of cooling off, mind you, with data out this week revealing that February had the fewest job vacancies since 2021. Given that companies often freeze hiring before layoffs, that could hint at changes in the broader jobs market. If that’s the case, and if Friday's numbers do miss expectations, the Fed might hold off on raising rates to avoid the risk of triggering an outright recession. In fact, ever since the job openings data came out, markets have been betting the Fed won’t hike rates at all next month.

The bigger picture: One hike to end them all.
If job growth does exceed expectations again, another 0.25-percentage-point hike could be on the table. But the Fed’s already dropped some serious hints that rate hikes are nearing their end, forecasting that it’ll fire off just one more volley this year. And with all the recent banking turmoil, anything bigger seems unlikely, unless the job numbers are truly jaw-dropping. The real risk, then, could be the Fed keeping rates high for longer than investors expect – which could hit corporate profits and stocks hard in the long run.

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Analyst Take

Watch An Analyst Value Microsoft’s Shares In Five Simple Steps

Watch An Analyst Value Microsoft’s Shares In Five Simple Steps
Photo of Carl Hazeley

Carl Hazeley, Analyst

You could spend months researching a stock, devouring thousands of reports and running statistical analyses that PhD candidates have never heard of. 

But it doesn’t have to be like that: my fellow analyst Paul recently put together a five-step template that helps you estimate any stock’s forward-looking figures in one simple process. 

I’m going to give it a whirl with Microsoft, given that its stock’s been on a nice run recently. 

If all goes well, I should come away with a decent understanding of what’s driven the second-biggest software giant’s past performance – and whether that’ll continue in the future.

So that’s today’s Insight: how I broke down Microsoft’s fundamentals in five steps, and what that tells me about the stock’s future.

Read or listen to the Insight here

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Money Market Cash-cade

Money Market Cash-cade

What’s Going On Here?

A wave of cash is flowing into money market funds – and it could be set to keep rolling in.

What Does This Mean?

Money market funds are a kind of financial lifeboat, investing in low-risk assets that are easy to cash out of, like short-term government bonds. And ever since last month's banking crisis rocked confidence in bank deposits, investors have been clambering into those lifeboats at record speed. Plus, funds like these tick the "returns" box too – rising with the tide of interest rate hikes better than deposit accounts do. No wonder over $300 billion poured into them in just three weeks, then, swelling holdings to a record-breaking $5.2 trillion at the end of March. And Barclays thinks we've only just set sail, too: the firm sees another $1.5 trillion flowing into money market funds over the next year.

Why Should I Care?

Zooming in: Trouble with a capital T.
Investors might be right to move their money. A keen-eyed economist, who predicted the global financial crisis, issued a troubling warning on Thursday – saying that even more banking issues could lie ahead, and adding to worries about deep, underlying problems in the financial system. If that does happen, hedge funds that shorted banking stocks – meaning they borrowed and then sold their shares, hoping to buy them back for less – will be in for a payday. Data out this week showed that last month’s trouble netted them over $7 billion in profit, the biggest windfall the banking sector’s given them since the financial crisis.

The bigger picture: Please, not now.
Another financial fiasco would spell trouble for the global economy, which is already juggling quite a few challenges. After all, the International Monetary Fund shared a pretty dour outlook on Thursday, predicting global economic growth of just 3% over the next five years, as higher interest rates take their toll. That marks the most sluggish medium-term forecast since 1990, with over 90% of advanced economies set for a slowdown.

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🌍 Finimize Live

🥳 Coming Up In The Next Week…

All events in UK time.
🔮 Future of Finance: Waking Up To The Retail Investor (London): 6.30pm, April 12th
💸 Should You Save Your Cash Or Invest?: 1pm, April 13th

👀 And After That…

🌎 How To Invest Like A Venture Capitalist: 6pm, April 17th
💰 How To Build Wealth In The New Tax Year: 1pm, April 18th
🙋‍♀️ Women And Investing: Powering Up Your Pension: 5pm, April 25th
💥 Investing 101: The DIY Investor: 1pm, May 4th
🎉 Modern Investor Summit 2023: 12pm, December 5th and 6th

🎯 On Our Radar

  1. It’s not just squeamishness. Here’s why some people can’t stand true crime.
  2. Ubiquitous McDonald’s. This photographer discovered the golden arches had unwittingly slipped into tons of his shots.
  3. No-show audiences. Nobody’s turning up to authors’ book-signing events.
  4. Mind-controlled robots. New “graphene sensors” mean the future’s already here.
  5. Super-fast falsehoods. False memories only take a few seconds to lodge in your brain.
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