Alternative data sources and modalities will lead the next era of intelligence.Read more about it in the latest State of AI report.Jake (@immutablejacob):Despite the incoming drought of public text, we're nowhere close to using up the world's data.The world's total data is ~200 ZBs and doubles every ~2 years.The valuable modalities and sources that can be drawn from include:> Audio (@psdnai, @silencioNetwork, @Meet_Perle)> https://t.co/hcBLMg1jxm ...

Core Insights - The cancellation of the October jobs report is surprising, especially since businesses maintain payroll records, making data retrieval seemingly straightforward [1][2] - The decision to combine October data with the November release, which will be published in December, indicates ongoing challenges in data collection due to the shutdown [2][3] Labor Market Implications - The Federal Open Market Committee (FOMC) will lack crucial October labor market data during its December 9 meeting, relying instead on alternative data sources and a delayed September jobs report [3][4] - The FOMC will need to adjust its reliance on official statistics, particularly non-farm payrolls, due to recognized measurement issues at the Bureau of Labor Statistics [4][5] Alternative Data Analysis - Bloomberg Economics has developed an alternative data-based labor market index indicating that the labor market is currently one standard deviation weaker than historical norms [6] - If the Federal Reserve considers this alternative data, it may provide justification for a potential rate cut, even if not all members agree on the decision [6]

Core Insights - The preliminary ADP jobs data indicates a decline in private sector job creation, with a four-week moving average down by 11,000, suggesting a weakening job market as October progressed compared to September [1][3]. Job Market Dynamics - The month-on-month change in job creation is approximately -44,000, contrasting with a previous increase of 42,000 [2][3]. - The NFIB small business optimism index fell by 0.6% to 98.2%, marking the lowest level since April, although it remains above the long-term average [4]. - Plans to increase hiring among small businesses decreased by 1 point to 15%, while plans to invest rose by 2 points [4][5]. - There is a notable increase in concerns regarding labor quality, which rose by 9 points to 27%, the highest since the pandemic, indicating difficulties in finding suitable workers [5][6]. Economic Context - The current job market is characterized as a "low fire, low hire" economy, with businesses struggling to find qualified workers despite not actively hiring [6]. - The impact of new immigration and deportation policies may be contributing to the challenges businesses face in filling positions [6]. - The upcoming government jobs report may be outdated or unreliable due to data collection issues during the shutdown, raising concerns about the accuracy of future employment statistics [9][11].

Core Insights - The analysis highlights the importance of alternative data sources in understanding wage inflation trends post-COVID, indicating a shift in wage dynamics with a softening observed primarily at the high end of the wage spectrum [1][3][5] Wage Dynamics - The recovery has shown a K-shaped pattern, where the lower end of the wage spectrum remains weak while the high end has shown some strength recently, but this has now reverted to pre-COVID levels [2][3] - Aggregate wages are returning to pre-COVID levels, indicating a softening trend, particularly from the high end rather than the low end [3][5] Market Implications - The current labor market data suggests a slowdown, which aligns with other data sources and indicates a 70% probability of the Federal Reserve continuing its rate-cutting cycle [5][6] - The dependency of risk asset markets on potential rate cuts from the Federal Reserve is emphasized, with fixed income markets being more sensitive to rate changes compared to riskier assets like high yield [6][7][8] Valuation and Market Sentiment - Recent market movements reflect a pullback from previously euphoric valuations, particularly in the equity market, which had become overextended [11][12][13] - The current market environment presents a potential buying opportunity, contingent on the macroeconomic outlook remaining stable [13] Investment Strategy - The sweet spot for investment is identified in the middle part of the yield curve (five to seven years), where the Fed's normalization efforts provide some support [14][15] - Strong corporate earnings and balance sheets suggest limited downside risk, making carry trades appealing in the current environment [17][18]

Fixed Income Market Outlook - BlackRock's Q4 outlook emphasizes disruption and desynchronization of global economies, creating opportunities beyond the US fixed income market [2] - The firm suggests investors consider global opportunities due to differing central bank actions across varying inflation environments [2] Investment Strategies - BlackRock favors the short to middle end of the yield curve, but notes improved valuations in the back end, suggesting adding some exposure there [3][4] - The firm highlights municipal bonds as an attractive opportunity due to a yield premium compared to treasuries [8] Alternative Data & Economic Indicators - BlackRock utilizes alternative labor market data, including job posting and wage data, to gauge the macro environment, especially during government shutdowns [6][7] - Wage data validates the economic slowdown already priced into the market, supporting expectations of continued Federal Reserve easing [7] Impact of Macroeconomic Factors - A weakening dollar and uncertainty around the back end of the treasury curve due to fiscal policy are driving investors towards alternative stores of value like gold [9][10] - Declining real interest rates, resulting from lower inflation expectations and Fed rate cuts, are also supporting gold prices [11]

Core Insights - Moretus Research specializes in high-quality equity research aimed at serious investors, focusing on clarity, conviction, and alpha generation [1] - The firm employs a strategy of "positive paranoia" to analyze investments, emphasizing sentiment analysis and competitive positioning to predict future performance [1] - A notable investment recommendation was made at the beginning of 2023, where Carvana was purchased at $5 per share, highlighting an 88% short interest that was deemed excessive, leading to a significant turnaround [1] - The investment in Carvana yielded over 60 times returns over three years, showcasing the firm's ability to identify substantial investment opportunities [1] - Moretus Research aims to uncover data advantages through alternative data sources, focusing on both current holdings and potential future investments [1]

Core Insights - Moretus Research specializes in high-quality equity research aimed at serious investors, focusing on clarity, conviction, and alpha generation [1] - The firm employs a strategy of "positive paranoia" to analyze investments, emphasizing sentiment analysis and competitive positioning to predict future performance [1] - A notable investment recommendation was made at the beginning of 2023, where Carvana was purchased at $5 per share, highlighting an 88% short interest that was deemed excessive, leading to a significant turnaround [1] - The investment in Carvana yielded over 60 times returns over three years, showcasing the firm's ability to identify substantial opportunities [1] - Moretus Research aims to uncover data advantages through alternative data sources, covering both current holdings and potential future investments [1]

Summary of Key Points from the Conference Call Industry Overview - The analysis focuses on the US consumer spending landscape, utilizing alternative data sources such as Barclays credit card spending and LightCast job openings data to gauge economic activity in the US [1][2][4]. Core Insights - **Consumer Spending Trends**: - Mid-April credit card spending data indicates that spending growth in 2025 matches or exceeds the average growth from previous years across nearly all retail categories [4][10]. - Recent data suggests a front-loading of spending in anticipation of tariff-induced price hikes, particularly in categories like automobiles [4][18]. - Consumer spending on dining out remains strong, indicating no significant weakness in consumption [4][11]. - **Job Openings and Labor Market**: - There are no alarming drops in job openings as of April 19, 2025, with most industries showing a downtrend that aligns with seasonal trends [4][50]. - The current downtrend in job openings is less severe than in 2023 and 2024, suggesting relatively strong momentum in new job openings [4][50]. - **Spending Momentum Analysis**: - The latest 4-week spending growth in 2025 is comparable to or better than the averages from 2018-2019 and 2023-2024 [5][10]. - Specific categories such as food-away-from-home and building materials show strong spending momentum, while categories like gas and furniture are experiencing some weakness [4][24][32]. Additional Important Insights - **Sector Variability**: - There is a notable dispersion in consumer sentiment across sectors, with some sectors, particularly IT, expressing concerns about consumer weakness [41]. - The correlation between credit card spending and retail sales remains high, indicating that spending trends are likely to reflect retail performance [43][47]. - **Future Outlook**: - Analysts express caution regarding the sustainability of current retail sales momentum due to recent declines in consumer sentiment [42]. - The credit card spending momentum is expected to lag if consumer weakness becomes established, similar to trends observed during the COVID pandemic [43]. - **Methodology**: - The analysis relies on merchant category codes associated with credit card transactions to measure spending growth across various retail categories, focusing on avoiding seasonal distortions [14][16]. This summary encapsulates the key findings and insights from the conference call, highlighting the current state of consumer spending and job openings in the US economy, along with potential future trends and sector-specific observations.