Stocks Up On Friday, But Down For The Week, 2 Inflation Reports On Deck This Week

Market Moves You Need to See Stocks Up On Friday, But Down For The Week, 2 Inflation Reports On Deck This Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up On Friday, But Down For The Week, 2 Inflation Reports On Deck This Week Stocks closed higher on Friday, although still down for the week. But a fair amount off their intraweek lows. Friday's larger than expected Employment report appeared to help the market. But let me go into the possibilities of why. The Employment report showed nonfarm payrolls for March grew by 303,000 last month (232,000 in the private sector and 71,000 in the public), vs. the consensus for 200,000 (170K private and 30K public). The unemployment rate ticked down to 3.8% vs. last month's 3.9% and views for the same. The participation rate rose to 62.7% vs. last month's print and estimates for 62.5%. And average hourly earnings rose 0.3% m/m, in line with the consensus, and above last month's 0.1% pace. On a y/y basis it came in at 4.1%, in line with the consensus, but under last month's 4.3%. Revisions to previous months were a mixed bag with January adjusted up by 27,000 to 256K (up from 229K originally), while February was adjusted down by -5,000 to 270K (from 275K). Looking at March's internals, however, paints a bit of a different picture than the headline number suggests. That's because part-time jobs (according to the household survey, which is different than the establishment survey used in the headline number), increased sharply in March, while full-time jobs actually fell. Additionally, the number of people holding more than one job jumped. Admittedly, the establishment survey (which canvasses businesses), is considered more accurate than the household survey (which talks to individuals). Nonetheless, the increase in part-time jobs and the decrease in full-time jobs, suggests a less robust labor market than the headline number would imply. While a hot jobs market lead some to believe it pushes a rate cut further down the road, a closer look at last week's report shows it may not be as hot as it seems. However, the fixation on rate cuts might not matter that much right now. That's because, no matter how you slice it, the unemployment rate remains low, job openings are plentiful (above trend), household incomes remain near record highs, and corporate profits are estimated to increase. And all of that is bullish for stocks, regardless of interest rate cuts. Of course, once those numbers change, then that could be a different story. But the economy is far from contraction, and well below the pace for peak inflation. Wonderful conditions for the Fed's so-called soft landing, and why stocks keep going up. The market will shift its focus back to inflation this week when the Consumer Price Index (CPI) (Wednesday, 4/10), and Producer Price Index (PPI) (Thursday, 4/11), come out. And then next week, earnings season will have officially begun. And that's great news since stocks typically go up during earnings season. In the meantime, the market will try to digest last week's jobs report and volatility. The big three indexes remain near all-time highs. And it won't take much (maybe a few good economic reports, or better than expected earnings), to push them into record territory yet again. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Why Haven't You Looked at Zacks' Top Stocks?]( Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year. Today you can access their live picks without cost or obligation. 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