Macroeconomic indicators at highs

Macroeconomic indicators at highs
September flash PMIs and record gold: where we stand after Powell

Market sentiment remains buoyant: U.S. indices are at record highs, September flash PMIs point to overall moderate expansion, and—behind it all—the Fed’s message urges active prudence. On top of that, gold has notched fresh all-time highs, signaling that a meaningful share of investors is still willing to pay for protection.

What Powell said (September 23)

In his remarks, Jerome Powell reiterated three cornerstones:

1. No preset path: upcoming moves remain data-dependent.
2. Dual mandate in balance: keep inflation on a trajectory toward 2% without needlessly weakening employment.
3. Risk assessment on both sides: easing too soon may reignite prices; staying too restrictive may weigh on jobs.

Translation for markets: the Fed is accompanying the soft-landing scenario but isn’t treating it as a given. Expectations for “automatic” cuts are being folded back into a corridor of conditionality.

The flash PMIs: expansion, yes—but uneven

• U.S. (S&P Global): Composite 53.6 from 54.6 — growth cooling, but still above 50.
• Euro area (HCOB/S&P Global): a slight improvement with a 16-month high, driven by services; new orders still tepid.
• Germany: Composite 52.4 (16-month high), services accelerating, manufacturing below 50.
• France: Composite 48.4, a clearer return to contraction.
• United Kingdom: Composite 51.0, a marked slowdown versus August.

Takeaway: the global cycle remains in moderate expansion, but with divergences: Germany is moving, France is slowing; the U.S. remains resilient—without euphoria.

Gold: a new all-time high

Helped by a mix of expected Fed cuts and safe-haven demand, spot touched a new intraday record around $3,790/oz (December futures above $3,800). This signals investors continue to buy protection against macro/geopolitical tail risks and the risk of “slow cuts” that keep real rates low over time.

Oil: the EIA test

The latest Weekly Petroleum Status Report (week to 9/12) showed a large crude draw; the new update is due today. Beyond the headline, keep an eye on Cushing and distillates to gauge whether actual demand (and refining capacity) supports prices or keeps the market in a range.

Market implications (macro → assets)

1) Balanced Fed message = quality premium.
Powell hasn’t closed the door on cuts but ties the pace to data: historically this backdrop favors quality growth and solid balance sheets (margins, FCF, pricing power).

2) Uneven PMIs = a “two-speed” Europe.
With Germany > France, Europe’s center of gravity tilts toward exporters and high-quality cyclicals in the DACH area; in France and the UK, a more defensive selection is preferable.

3) Gold at records = rising hedge demand.
Gold’s rise aligns with the idea of gradual cuts and contained real yields: it helps dampen violent equity sell-offs, but it’s a reminder that tail risk hasn’t vanished.

Equity ideas (not personalized investment advice)

• Quality Tech & “AI enablers” (U.S./global core).
  Structural support from AI capex and more visible earnings; favor names with high ROIC and recurring FCF. Powell’s data-dependent stance reduces policy-shock risk.
• Quality cyclicals in Europe, with a Germany tilt.
  Industrials, automation, and European semis exposed to exports can benefit from Germany’s relative strength; maintain discipline on valuations and leverage.
• Keep a sleeve in defensives/healthcare as a cushion.
  If upcoming data or Q3 guidance disappoints, a barbell with quality defensives tempers portfolio volatility.
• Energy: be selective while waiting for the EIA print.
  Prefer integrateds with buybacks and capex discipline; size your beta exposure to crude based on evidence from inventories/products.
• Gold equities as a tactical hedge.
  Strength in the metal can (not always linearly) lift low all-in-cost producers; treat this as diversification, not a pure directional bet.

In short: after Powell and with the flash PMIs in hand, the soft-landing narrative is alive but not locked in. Record gold says investors are not abandoning hedges. For equities, the playbook remains quality first, with a tilt to “good” cyclicals where PMIs allow, and a defensive cushion for when data gets noisy.