US stocks plunged on Friday as investors digested a final 2024 jobs report that blew past expectations on hiring, raising more uncertainty about the path of interest rates this year.
The Dow Jones Industrial Average (^DJI) sank about 1.4%, or over 500 points, while the S&P 500 (^GSPC) fell 1.4%. The tech-heavy Nasdaq Composite (^IXIC) tumbled 1.7%, leading the sell-off. The three major gauges erased all year-to-date gains with Friday’s pullback.
The December nonfarm payrolls report showed a very healthy labor market: The US economy added over 250,000 jobs in the month, while the unemployment rate fell to 4.1%. That’s the good news. The less good news is that the strong reading could prompt the Fed to keep rates higher for longer, some on Wall Street believe.
Jeez! Talk about a knee jerk reaction. More people work and consume means more corporate revenue & profit.
I mean, it may but it in no way necessarily does (and often doesn’t) - otherwise the stock market would not award companies (with a price increase) when they cut expenses by announcing layoffs.
For years and years Wall Street complained about the ills of ZIRP. Then we left ZIRP and they complained still. Now looks like we aren’t going back and WS complains yet again.
Wall Street needs to wake up and realize that we aren’t going back to very low rates, and that is a GOOD thing.
For the time being, just bought a 4-month Treasury at 4.3% in my IRA, about 6% of assets. Total bond exposure (in all forms) is about 11%, and thinking of increasing that.
Fires do ignite fire bugs, both idiots as in the story, but also far more dangerous types, often ex-firemen.
But when the Santa Anas and Diablos blow, hot and strong and continous; when the chapparal is thick with resin and dry dry dry, and their often accompanying yellow pines even more so, like poised roman candles; well, tiny mishaps and stupidities (smoking!!!, a motor sparking, an old steel fence post falling onto a flintish rock….) then kaboom.
They are called devil winds for a good reason. I cannot lay my finger on it, but Raymond Chandler, amongst other southern california authors, used the blowing of a Santa Ana as almost a character, a sinister character, in many of his best works.
When the Santa Ana blows you need to be already fireproofed and ready to flee. Period.
Corporate revenue & profit are linked to GDP & inflation growth. Sometime a corporation may be able to increase production via more efficiency requiring less employees. But usually they expand by adding more production sites or add shifts which require more employees. Most workers do not have the ability to just on that money. They spend it.