Definitely not complaining, but still trying to get my head around today’s jobs report.

As is macro strategist Cameron Crise:

“I am still struggling to pick my jaw up off the floor after Friday morning’s payroll data. To be sure, we knew that there was plenty of uncertainty surrounding the figure, but not a single one of the 78 economists polled by Bloomberg anticipated an increase in employment. Instead, we got a rise of 2.5 million — more than four standard deviations above the forecast median. Statistically, that’s actually a smaller surprise than the 273k rise initially reported for February — but I think we all know that this one was more of a shocker. The BLS admitted that there are some distortions to the reported figures, which leaves us all kind of scratching our heads. What are you supposed to do when you don’t know what to do with the data?”

“Now, if I had told you at the end of April that the economy would add two-and-a-half million jobs in May, you might well have projected that stock markets would rip higher. Of course, that’s exactly what happened, so I guess the score is Robinhood Bros 1, PhDs 0. The initial response to buy stocks after the report is understandable, but isn’t this the outcome that we priced last month? Or is the new rally factoring in a rise of 10 million jobs in June?”

“What do you do when you aren’t sure what to do? Freezing like a deer in the headlights isn’t a great idea, but then again neither is rushing around like a headless chicken, buying every random ticker that your eyes alight upon.” 

“The S&P 500, meanwhile, was expensive even before Covid hit, and Friday’s data withstanding, on balance it’s not exactly cheaper now.”