We're keeping a semi-live look on the volatile markets. Here's the latest from Barron's reporters...
5:10 p.m. It's amazing how one week can erase most of the markets fears. We entered the week worried of a full-blown trade war, only to see the Trump administration's tariffs watered down enough to prompt a relief rally. And today's combination of strong job growth and muted wage increases calmed the market's nerves about an imminent inflation spike that would force the Federal Reserve to accelerate its wage hikes to catch up.
No wonder, then, that the S&P 500 rose 1.7% to 2786.57, while the Dow Jones Industrial Average climbed 440.53 points, or 1.8%, to 25,335.74, and the Nasdaq Composite gained 1.8% to 7560.81.
Could it all come apart next week? Sure. Already folks are trying to find the dark side in today's jobs report. Economists at BNP Paribas, for one, contend that February was a one month blip, and that payroll growth will slow, the unemployment rate will fall, and wages will rise. In fact, they see the unemployment rate falling to 3.6% by the end of the year, while wages grow 3.1% by the end of the year. "At face value, the February jobs report seems supportive of the goldilocks economic story of continued strong employment gains amidst moderate inflation pressures," they wrote in a report today. "However, we see these trends as short-lived."
Let's hope not. - Ben Levisohn
3:33 p.m. Stocks continue to rally into the close on Friday. The Dow Jones Industrial Average climbed just over 400 points, or 1.6%, before falling back to a gain in the 395 point range at the moment, at 25,294.30. The Nasdaq is also up 1.6%, to 7750.04. The S&P 500 is bringing up the rear, up 1.5%, to 2781.22. - Teresa Rivas
12:28 p.m. Did way say 270 points for the Dow Jones Industrial Average? The Dow has now gained 326.38 points, or 1.3%, to 25,221.59, while the S&P 500 has risen 1.2% to 2772.71, and the Nasdaq Composite has climbed 1.3% to 7524.73.
And why shouldn't it? No less than Gluskin Sheff's David Rosenberg, who has a reputation as something of a curmudgeon, notes that the increase wasn't just big--the largest since July 2016--but also broad based. Construction payrolls added 61,000 jobs, while the manufacturing sector produced 100,000 jobs, the most since 1998. And even retail added 50,000 jobs, a sign that sector might have finally stopped shrinking, Rosenberg says. And even the disappointing average hourly wages number wasn't necessarily as bad as it looked. Rosenberg notes that pay for non-supervisory & production workers rose 0.3% month over month, far better than the headline number. "Perfect numbers are a rarity, to say the least, but today's employment report has to be considered a candidate," he says. "All in, i can't find a blemish, wart or scar on this jobs report."
Neither can the market. - Ben Levisohn
10:46 a.m. The market really loves that job number. The S&P 500 has risen 1% to 2767.03, while the Dow Jones Industrial Average has gained 270.16 points, or 1.1%, to 25,165.37. The Nasdaq Composite has climbed 1.1% to 7509.92.
And why shouldn't it? The 313,000 jobs added, well more than the 200,000 predicted by economists, shows that the U.S. economy may really be accelerating, while the minimal increase in wages shows that inflation isn't yet a problem.
The payrolls number overshadows the fact that today is the ninth anniversary of the S&P 500's Financial Crisis closing low, and there's no better way to celebrate with a big gain and signs that the economy continues to hum along. Capital Economics' John Higgins notes that as long as the US economy continues to do well, the stock market should not only hold up, but surge some more. "On the contrary, it could conceivably recover more from its wobble earlier this year, as growth is bolstered in the near term by tax cuts and other fiscal stimulus," he says. Just watch out for 2019 or 2020, when higher inflation and a hiking Fed could cause the U.S. to sink into recession, Higgins says.
So you're saying there's still time? - Ben Levisohn
7:57 a.m. Futures are up slightly this morning, but barely, and that makes a lot of sense because we're waiting the February payrolls report to be released at 8:30 a.m. S&P 500 futures have advanced 0.1%, while Dow Jones Industrial Average futures have gained 23 points, or 0.1%. Nasdaq Composite futures have risen 0.1%.
And as we saw a month ago, a little blip on the wage front could have major ramifications for a market that just made it through the Trump tariff saga relatively unscathed. Economists are expecting the U.S. to add 200,000 jobs, but it would take a huge surprise one way or the other for that number to matter. Instead, watch the average hourly wages, which are expected to rise by 0.3% month over month, or 2.8% from a year ago. If there are no surprises there, then perhaps Treasury yields would finally calm down, and maybe the equity markets too. "The foundations of risk-friendly markets are made out of the collapse in volatility in 10year Notes," writes Societe Generale strategist Kit Juckes.
And a little less volatility would go a long way right now. - Ben Levisohn