Many pundits are saying that the strong jobs report will reassure investors about the economy and consumer spending. I would offer the counter-point that in recent weeks investors have been less sensitive about the economy and more worried about inflation, and strong jobs are more an indicator of inflation.
Investors, however, have had a long weekend to absorb the news and that may leave them more inclined to bolster the market by considering strong jobs as good news.
Those who are thinking more critically will note that business spending has been pulling back and that jobs growth is a lagging, not a leading, indicator which peaks after the economy does. Combine that with the impending earnings season set to show weakened growth and I would say that despite any pop this week, markets face troubled times in the next couple months.
Invest well,
FW