I’ve written before in these pages – particularly in the 2010s – about how financial markets seemed to exist in a looking glass world. Bad news gets taken as good news because it raises the prospect of an intervention by central banks or governments on rates or stimulus which might, in turn, act as a catalyst for equities.

There have been elements of that at play in more recent times as investors look for reasons why the Federal Reserve and its counterparts in London and Brussels might seek to lower rates from the levels they reached as the battle against post-pandemic inflation reached its peak.

In China, the sluggish performance of the economy post-Covid has also sometimes had the inverse reaction to what you would expect, something which can be measured in the showing of London’s mining contingent, as investors hope this will push Beijing into adopting measures to boost growth.

However, sometimes bad news is just bad news, and that seems to have been the case with the latest US jobs numbers on 5 September, which Sabuhi Gard analyses in more detail in this week’s News section.

Giving his own take on the data, Berenberg’s chief economist Holger Schmieding says: ‘Judging by the second weakish labour market report in a row, the US economy seems to be losing momentum. Employment increased by just 22,000 in August (far below the Bloomberg consensus estimate of 75,000), following an upwardly revised rise of 79,000 in July. The three-month average of job gains reached 29,000 in August – almost unchanged from 28,000 in July.

‘Accounting for future benchmark revisions, these numbers suggest that the US is now losing jobs. All in all, this was a weak jobs report from every angle.’

Schmeiding suggests that, as a consequence, a 25 basis point cut at the 17 September meeting now appears almost certain.

He observes that while Fed officials such as Christoper Waller and Michelle Bowman might be inclined to vote for a 50 basis point cut, the possibility of such a large move is low. Backing this up with the observation that the unemployment rate, considered the key metric, had only risen slightly to 4.3% in August from 4.2% in July.

Regarding payrolls, he argues headline figures of 50,000 to 60,000 would not necessarily indicate a weak labour market, particularly given reduced immigration was limiting the pool of available workers.

However, he adds that a three-month average below 30,000 for two consecutive months, combined with a rising unemployment rate, could suggest that labour demand was cooling more quickly than labour supply.

Also in this week’s magazine, we examine how companies can achieve a durable competitive advantage and look at some real-world examples. Plus, we look at why the financial sector is not as dull as it sounds and flag the stocks which hedge funds are buying and selling right now.

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