Weighing the Week Ahead: How Strong is the Labor Market?

A holiday-interrupted week is loaded with important economic data. Since many market participants will skip Monday to stretch their weekend, the action will focus on Friday’s employment situation report. People will be asking:

Just how strong is the labor market?

Last Week Recap

The big economic news last week was the (slight) increase in volatility. Tuesday’s decline was attributed to the ACA repeal/replace delay and what it implied for the Trump agenda. That was forgotten by Wednesday. Thursday saw technology selling right at the opening. Art Cashin attributed the rotational decline to dueling programs. That had little carry over to Friday.

Our question from two weeks ago – a possible change in market leadership – got some real attention. Financial stocks did well in the wake of the bank stress test results.

The Story in One Chart

I always start my personal review of the week by looking at this great chart from Doug Short via Jill Mislinski. You can see the day-to-day shifts, as well as the small overall effect, less than 0.5% for the week.

Doug has a special knack for pulling together all the relevant information. His charts save more than a thousand words! Read the entire post for several more charts providing long-term perspective, including the size and frequency of drawdowns.

Note to Readers

Thanks to Investopedia for including us among the top 100 most influential advisors. Some of these lists only go for the huge firms. Others emphasize those with great fame, and fame alone. We have a nice team at NewArc, but we are all busy and wear many hats. I am delighted to have the chance to write as much as I do, since we emphasize communication and accessibility. For me it is all after-hours.

Congratulations to Josh Brown for his well-deserved #1 ranking and Michael Kitces at #2.

The News

Each week I break down events into good and bad. For our purposes, “good” has two components. The news must be market friendly and better than expectations. I avoid using my personal preferences in evaluating news – and you should, too!