The big monthly employment report was just released and lo and behold, the U.S. economy continues to outperform. It continues to exceed expectations. The economic “experts” continue to be dead wrong. Late last year, I shared that I thought there would be a trough in the jobs market. I wasn’t ready to jump on the bandwagon that AI was stealing everyone’s job. I thought AI could be a culprit for creating less jobs or it could be closing the southern border. I did not have high conviction. I just thought that too many people had become too negative on the jobs market that the most likely path was a firming. January through April were too volatile that I said to use a three-month moving average which showed just under 100,000 new jobs per month. That was okay.
This morning we saw not only 172,000 new jobs created in May versus only 80,000 expected, but also that March and April saw good upward revisions. This is going to drive the economic Armageddon crowd crazy. You know those doom and gloomers. They openly root against the U.S. economy. The hope and pray for recession. Well folks, the next recession is coming, but it is not today.
Pre-market trading definitely does not like the numbers. The stock market is saying good news is bad news because the Fed cannot cut rates anytime soon. The bond market does not like the number either. At least early on, a “risk off” day is shaping up. That means, stocks, gold, oil and crypto all looking lower. Keep an eye on defense, like staples, utilities, healthcare and REITs to see if it’s a sell it all day.
On the surface, my sense is that any pullback is buyable, but I want to see how the day shapes up. It’s a Friday in the summer so lower liquidity could create a little vacuum.
After a crummy weekend a week ago, Ma Nature is bringing the heat to CT today through Sunday. My newly sprouted grass will not be happy. Seriously, can she just bring 70s for an extended spell? Another golf tournament is ahead and I know I will be swimming with the heat. My nice, AC’ed office will see me at some point to catch up.
On Wednesday we bought SSO. We sold SDS, NUGT and some QLD. On Thursday we bought CBRS, OIH, more QLD and more MQQQ. We sold SSO and some XOP.
