The stock selloff continued on Friday, with employment growth in November weaker than expected. Concerns about what the omicron variant might do to the global economy have also weighed on the markets.
Here’s what five experts had to say about Friday’s drop.
Liz Young, head of investment strategy at SoFi, digs below the surface of the jobs report and what it means for the Federal Reserve.
“I think there was a bit of a mixed message here and that gives the Fed a little more thought, and we’re not necessarily sure they’re going to raise rates that quickly. So I think the market is trying to work on those numbers, but the Fed is looking at the labor force participation rate and the unemployment rate and both are positive, so I actually think that gives the Fed a chance to say we’re still going down And rate hikes are certainly not out of the question in the summer and fall of next year.
David Kelly, chief global strategist at JPMorgan Asset Management, sees “a lot of momentum” in the release.
“What he’s saying is there’s a lot of momentum in the job market. The payroll survey, I think, is a bit disrupted by seasonal factors. And we actually have it. added 330,000 jobs in retail… The big picture is that we are running out of workers quickly and wage growth is very strong, especially for low paid workers. So I see a lot of momentum here, more momentum on the demand side than the supply side. And I tend to agree that that means the Fed is probably declining faster and hinting at the rate hike earlier than before. “
Diane Swonk, chief economist at Grant Thornton, says the numbers were better than at first glance.
“The household survey and the payroll survey, the dissonance between them is deafening, and the reality is somewhere in between, which is much, much better. … I think the Federal Reserve will embrace the falling unemployment rate and the rising unemployment rate. turnout at the highest level since March 2020. It’s something they’ve been waiting to see, people participating. don’t believe it for a second. And I think that gets into some of the seasonal issues …. We’re actually seeing wages in this industry go up. “
Jan Hatzius, chief economist at Goldman Sachs, discusses the seasonality of the November report.
“It is certainly a huge gap between the survey of establishments, the payroll figures and the household survey, that is to say the unemployment rate with this drop of four tenths of the employment rate. unemployment, a 1.1 million increase in household employment. Normally you would put a lot more weight on the establishment survey numbers because they are much less volatile from month to month. , I think in this case I would give the household survey a little more weight than usual, partly because the numbers were so impressive in the household survey, and partly because ‘there may be questions about seasonal adjustment in general in such an unusual time as this. ”
JoAnne Feeney, portfolio manager at Advisors Capital Management, shares her take on the impact of the omicron variant on stocks and the economy.
“Two things have happened. First, we still don’t have information about the severity of the disease caused by this particular variant and how effective the vaccines are. But what we seem to be learning now is that it is much more contagious. And so that increases the degree of uncertainty about the consequences of omicron. Because if it is more severe in terms of disease, it makes matters worse, and although we cannot expect at a lot of lockdowns it will make people stay home fairer on purpose. On the other hand, if it’s softer and spreads faster, that would actually be a good thing. And so I think what we’re seeing is that people are taking some risk on the table, and that both drives up bond prices and drives down particularly risky stocks. But that’s not happening everywhere in the world. technology. Technology certainly feels it. the biggest, but note that there are still some really solid tech names like Broadcom, for example, Qualcomm is holding up well, so you really have to choose where you want to be exposed for your customers. “