March Job Growth Soars, But – Stock Market Bounces, But

Greetings from Midway Airport in Chicago where we are connecting from Indy to fly home. It’s a been such a fun almost week of travel although the outcomes were not what UCONN nation had hoped for. We did spend most of our time at one of my favorite resorts in one of my favorite cities, Scottsdale, AZ. The sunsets just never get old.

While the markets were closed for Good Friday, the government released the monthly employment report and it was a doozy. Recall that January’s report far exceeded expectations to the upside. February was a clinker, well below expectations. March showed a whopper with new job growth at 178,000, trouncing the 59,000 expectation. Interestingly, we did not see significant revisions to Jan nor Feb which I had thought would come.

What gives? Are the numbers being manipulated as some claim?

Nope.

This goes back to a longstanding issue that I continue to point out. The data collection methods are antiquated. It’s not partisan. There’s no conspiracy. We need a new system, but our folks in Congress do not want to allocate the several billion needed. And again, this is not Republican or Democrat. Neither party wants to spend the money. Eventually, the data get straightened out, but it takes many months.

Additionally, and trying not to get wonky, a huge driver of the report is the birth/death model which tries to predict the number of new businesses opening and closing. It’s somewhat accurate during the middle stages of an economic expansion, but less so at the beginning and end.

So what do we do with all this?

I stay the course and average the numbers when they get volatile like they are now. For 2026, the U.S. economy is creating roughly 82,000 new jobs a month which is just about where it needs to be with a relatively closed southern border.

The stock market has bounced from last week’s low. That SHOULD be the internal or momentum bottom. It COULD be the ultimate low, but that’s a bit more challenging to argue right now. 6700-6800 on the S&P 500 should provide a ceiling for a while.

The Russell 2000 is below. It led during the last rally to the January peak. It led on the way down. And now, it’s leading the bounce. I am keeping a close eye on this.

The 10-Year is next. Yields did not see a big move on the employment report. That spike to almost 4.5% will be interesting to watch.

Finally, many of aggressive models are not liking the market’s bounce while our conservative models are embracing it. Our gold trade also came to an end. I expect higher than normal portfolio activity this month.

On Wednesday we sold some NUGT, some QLD and some MQQQ. On Thursday we bought RAIL, JNK, XLRE, RECS, BAPR, more DWAS and more SVARX. We sold EMB, IWS and some FAPR.