Thursday, February 1, 2024

The Fed's Conundrum... Investor Amnesia? Is This Time Different? And An Investable Regime to Come! (video)

Note, yesterday's price action (strong by the close) in equities accurately anticipated strong earnings results out of Meta and Amazon (not so much from Apple) that carried over into post and pre-market futures trading. However, this morning's shockingly strong jobs number (nearly double the consensus expectation) -- doing quite the upside number on yields and the dollar -- has taken virtually all but a handful of tech stocks (that dominate the S&P and the Nasdaq) into the red as I type (26 minutes after the open). 

While the day is still young, literally 79% of the stocks in the S&P, and 76% of those in the Nasdaq are presently in the red.

Now, as we'll explore in this week's economic update, while the monthly jobs number is important, and often market-impacting, make no mistake, it is very much a lagging indicator, as it covers the previous month, plus revisions for the months leading up to it... Weekly jobless claims (higher than expected yesterday), and job openings and quits rates (rolling over), are historically very good leading labor market indicators.

I.e., while December's numbers were indeed impressive (although bearish for markets yearning for Fed cuts), their sustainability is in serious question going forward.

Yesterday's video (below) is not one to miss:

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

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