🇺🇸 The American Dream came true

What’s going on here?

The US added 177,000 jobs in April – far more than the 130,000 predicted – so, relieved to see the labor market hold its nerve, investors sent the S&P 500 back to loftier heights.

What does this mean?

That headline jobs figure is solid – although the report did come with a couple of asterisks. February and March’s numbers were revised down, scraping a combined 58,000 jobs from the count. And the unemployment rate stayed stuck at 4.2% – all while “labor force participation” ticked higher, indicating that more Americans are actively seeking work. The healthcare, transport, and financial sectors kept to their hiring sprees, but the manufacturing industry shed workers and government jobs fell for the third straight month. Bear in mind, too, that investors and policymakers alike think it’s too early to see the full effects of tariffs – not least because some levies are still on pause.

Why should I care?

For markets: Not if, but when.

The average hourly wage was 3.8% higher this April than last – the smallest annual increase since July. That bodes well for inflation, as rising wages feed into price increases. Combined with the better-than-expected job numbers, that dials down the odds of a rate cut at the Federal Reserve’s June meeting. Traders are still predicting three trims this year though, expecting the central bank’s hand to be forced as tariffs weigh on consumer confidence and the economy.

The bigger picture: Something isn’t adding up…

Americans haven’t been this pessimistic about their finances in five years, with surveys and other “soft data” making for depressing reading. Yet, the hard stats – counts of hiring, spending, and production – are holding up. That means one of two things: either the shock from tariffs hasn’t shown up in the numbers yet, or folk are bracing for an impact that might not materialize. If it’s the latter, markets could be in for a pleasant surprise.

What’s going on here?

The World Health Organization (WHO) will endorse “GLP-1” weight-loss drugs like Ozempic to treat adult obesity – problem is, popularity doesn't always equal profit.

What does this mean?

The WHO’s approval is more than a pat on the back for drugmakers. The organization could put GLP-1s on its “essential medicines” list – a status that has historically made drugs both cheaper and easier to access globally. Of the more than a billion people living with obesity, 70% are in low and middle-income countries. And at roughly $1,000 a month, the medicines are simply unaffordable to most of those folk. But the WHO’s memo calls for generic versions of the drugs to be developed – some of Novo Nordisk’s patents on semaglutide, the key ingredient in Wegovy, will run out next year. That should bring more options to the market at lower prices, likely making the drug much more affordable.

Why should I care?

For markets: Profit margins are on a diet, too.

Pricing has been an issue in the US, too. That’s forced major producers Novo Nordisk and Eli Lilly to one-up – or one-under, more like – each other’s price tags to secure exclusive deals with pharmacies. Novo Nordisk won CVS, likely by offering cheaper products than the previously stocked Eli Lilly stash. (Eli’s stock dropped off when word spread.) It wasn’t long ago that weight-loss drugs were ultra-premium products – but with prices starting to drop and the WHO pushing for lower-cost versions, investors may need to adjust their optimistic profit predictions.

Zooming out: Popularity can be a curse.

It’s not just the WHO: regulators and much of the public are pushing for weight-loss medications to be more accessible. So for investors, it’s no longer about whether this trend will stick. Instead, it’s about finding the firms that can innovate and access new markets quickly while navigating stringent regulations and tough negotiations with retailers.