Decoding Wall Street’s Reaction to the December Jobs Report

When it comes to the stock market, the old adage, “Good news is bad news” often holds true. This was manifestly clear when Wall Street wrapped up a softer week with a bang last Friday following the release of a much stronger than anticipated December jobs report.

Stock Market Performance: A Snapshot

The S & P 500 suffered a loss of 1.54% in Friday’s session and 1.94% for the entire week. The Nasdaq Composite and the Dow Jones Industrial Average, meanwhile, also fell sharply. They closed the week down by 2.34% and 1.86%, respectively.

Implications of the December Jobs Report for Federal Reserve Interest Rate Cuts

The jobs report led to a spike in bond yields as investors began re-evaluating the probability of further Federal Reserve interest cuts this year. This reevaluation springs from the strong U.S. economy projection suggested by the December employment data. More Information on Federal Reserve Interest Rate Cuts

Impact of Interest Rates on Equities

On Wall Street, higher interest rates are typically considered detrimental for equities, particularly in the early stages. This is because it alters a key component in valuation models for individual stocks and makes bonds appear more attractive as investments. Learn More About Equities

Why the December Jobs Report Matters

“What’s really bad for stocks is unemployment, is a recession. These [jobs] numbers are so far away from recession, the only thing I can conclude is that the Fed got it wrong,” Jim Cramer argued, referring to the Fed’s third cut since September. “But that doesn’t mean, necessarily, that CEOs are going to get it wrong, that businesses are going to get it wrong,” he continued.

Our Trade Moves in the Stock Market This Week

We made a trade into Friday’s weaker market, adding to our position in Home Depot for the first time since Dec. 19. It concluded an active week of moves — seven trade alert stories about six stocks — despite having one lesser day of trading due to former President Jimmy Carter’s state funeral.

Future Outlook: The Week Ahead for Economic and Corporate Data

With the influential JPMorgan Healthcare Conference taking place in San Francisco, it is set to be a busy week ahead for both economic and corporate data. We will be hearing from executives at GE Healthcare and fellow portfolio companies, Danaher, Eli Lilly, and Bristol Myers Squibb.

Stocks in Focus: Wells Fargo, Goldman Sachs, and BlackRock

Wells Fargo, Goldman Sachs, and BlackRock, all portfolio companies, are set to report their fourth-quarter results in the coming week. One common topic across all three conference calls is likely to be the regulatory environment under President-elect Donald Trump.

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