The three major U.S. stock indexes are back in the red after inching upward in the early trading.
Stocks ended the week on a downbeat note with Dow Jones Industrial Average down by 1.3%, the Nasdaq Composite off 1.5% and the S&P 500 had fallen 1.2%. the major news was regarding November jobs report that showed an unexpected slowdown in hiring along with downward revisions for the previous two months.
Jim Baird, who works for Plante Moran Financial Advisor, said that it’s all about the perspective.
He said,
There’s no question that the pace of the expansion is slowing, and that is apparent in the jobs report as well. Still…[t]he risk of recession still appears to be quite limited, and the jobs market still looks quite favorable for those looking for work. There’s a vast difference between slower growth and no growth.
The U.S. economy has been going at full steam for long and has given projections for slower upcoming year. It shouldn’t be surprising for the customers if the trend of the data is going towards a soft landing. With 155,000 jobs gain, the six month and one year moving average gains to 200,000 as noted by Alliance Bernstein’s Eric Winograd.
This is roughly the double of what is required for absorbing new workers into labor pool and controlling unemployment. Further, even though there is a fall in stocks at present, it can be argued that a bad report could turn out to be good if as a consequence, the Federal Reserve is persuaded to take a dovish stance following the increasing interest rate.
Even after the bull market has lasted for around 10 years along with lower corporate taxes and easy money, it is still hard to buckle down for harder times.
Source: Barrons and Biz News Index
