Job Growth Report Should Re-Accelerate – Markets Digesting For New Big Run
Today we have the “all-important” employment report which is the last high profile economic data point released before the Fed meets on the 18th. I am usually poor at guessing what the volatile number will be although I sense a quieter number than last month when we had weather and strikes impacting it. The economy should create many more jobs than shown in the last report when it was barely positive. I would think we are looking at greater than 150,000 and as high as 250,000. How’s that for not sticking my neck out? If somehow the number is less than 100,000 new jobs then we will have a new narrative on our hands and a Fed with a challenge.
Markets continue to be a solid footing. Large decline from new highs in December are as rare as the Jets winning the Super Bowl, somewhere around once in a lifetime. One thing to notice is that the market’s rally of late has been more narrow, meaning less stocks participating. You can easily see that with the S&P 500 making new highs while the S&P 400 and Russell 2000 have pulled back.
This is not the death knell for the bull market. Rather, if the bull remains super strong, this is one way to correct and work off the excesses before the next big move. If the S&P 500 decides to pull back and the mids and smalls pull back even more, then we have the makings of a bearish change in character.
My thesis is that the S&P 500 will pull back and then the mids and smalls will soar again into 2025. I am okay to be wrong. However, I will not be okay to stay wrong for long.
On Wednesday we bought SDS. We sold QQQW and some MQQQ. On Thursday we bought SPYB and sold SDS.
