India/ Crypto/ Employment
India
Since late September 2024, India’s NIFTY Index has fallen nearly -13%.
According to one broker’s research, current market sentiment makes for an interesting entry point:
Although the Sentiment metric above looks pretty good, we thought looking at a forward multiple might shed more light on the timing accuracy. The Index is currently at a level that historically has not seen the market bounce. However, when the forward multiple historically dips below 19X roughly, it does appear to be a market turning point:
As shown above, not quite there yet, and from the chart below the Index does not appear attractive on a technical basis:
Top panel- the 150 Day MA (Green line) has inflected lower.
Middle Panel- the RSI at 55 is neutral at best.
Bottom Panel- Stochastics suggest the Index has not flipped.
Crypto
Generally, not something we watch too closely, but with the recent focus on Crypto courtesy of the new Administration, we thought this chart might be of interest to a few.
ARK published research which can be found here:
Full report here: http://ark-invest.com/big-ideas-2025
Employment
Today, Friday Feb 7th, 2025, the Non-Farm Payroll numbers were released. The number was a bit shy of expectations, 143k vs 175k estimate, but the previous month’s revision more than made up for that difference.
As we have done before, looking “below the hood”, is often worth the time and effort. Of the 143k total number, 93k came from either Education & Health Services or Government.
We mentioned this previously but thought adding a few different charts might help offer perspective on the contribution these two sectors have had to the most scrutinized employment number out there.
Education
Can the education sector continue to add jobs at the previous pace with metrics like these above? Maybe they can, but that is a hard proposition to believe in.
With respect to the Government adding jobs, we have a different metric to offer. The Employment Cost Index, there are indexes for both Private and Government jobs.
Employment Cost Indexes for Private and Government
Notice that the Private employment cost Index has already rolled over, beginning back in 2022, at the height of Inflation. But, and more importantly, the Government employment cost index has yet to follow. It does not take an expert to see there is pretty solid relationship between the two, whether that is causational or coincidental is irrelevant.
So, if the pattern is to continue the cost of hiring a Government employee is becoming less expensive.
If we look at the Non-Farm Payroll Index less the contributions of Education/Health Services and Government jobs, it would look something like this.
If the contribution of Education/Healthcare Services and Government were to deteriorate, which seems likely considering the above metrics, then this chart is likely to see increased red soon.
According to a Bloomberg story:
“Out of the 2.2 million jobs added in the US in 2024, 1.4 million were in education, health care or government. In the 2010s, a solid contribution from those industries was closer to 700,000 positions per year, half of last year’s pace. These industries were laggards in the post-pandemic recovery, taking longer to normalize than food services or construction. Schools and hospitals weren’t getting into bidding wars for workers the way airlines or restaurants were in 2021. Government employers took longer to disburse the funds they received as pandemic relief or under President Joe Biden’s fiscal support programs. In some cases, it has taken weakness elsewhere for workers to accept the lower pay but relative stability of positions in education and government.”
So, if we revisit the Employment Cost Index chart but add CPI and the 10yr TSY yield for perspective, it’s hard to believe wage pressure will drive Inflation higher from here.
Why go through this entire exercise?
Well, if Government Job Cost index follows that of the Private sector, as shown above, the support it has been able to provide to the Non-Farm Payroll Index this past year will no longer be there. Education and Health care most likely follow as noted from the Bloomberg article above. And this is not even accounting for the recent activity of the new administration regarding Government employees.
Final anecdotal note surrounding the Government jobs. We think this speaks for itself.
5 of the top 7 richest counties in the US are in the immediate vicinity of Washington DC.
This region must be producing something more economically valuable than the nonstop innovation coming out of Silicon Valley, right?
Have a great weekend!
Best,
Meraki Trading Team
About Meraki Global Advisors
Meraki Global Advisors is a leading outsourced trading firm that eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. With locations in Park City, UT and Hong Kong, Meraki’s best-in-class traders provide conflict-free 24×6 global trading in every asset class, region, and country to hedge funds and asset managers of all sizes. Meraki Global Advisors LLC is a FINRA member and SEC Registered and Meraki Global Advisors (HK) Ltd is licensed and regulated by the Securities & Futures Commission of Hong Kong.
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