Historically speaking, right now is usually the best time of year for stocks. And today’s jobs data confirms that pattern will continue in 2023.
In fact, we’re on the cusp of a major stock market turning point and holiday rally.
From August through October, one of the biggest things weighing stocks down was the fact that it seemed like the economy wasn’t responding to the Fed’s rate hikes at all. Instead of cooling down, the U.S. economy was staying hot. And that was stoking fears that the Fed would have to keep hiking rates.
And those fears drove the stock market crash we’ve endured recently.
But here we are in November, and stocks just had their best week of the year.
Gearing Up for a Year-End Rally
So, why is that?
Because the economy is finally responding to the central bank’s rate hikes. Today’s jobs data illustrates that the economy is beginning to slow. And that affirms that the Fed is likely finished with its rate-hiking campaign.
Over the past few months, the economy has regularly added about 300,000 jobs per month. That’s an incredibly strong pace. But in October, the economy added just 150,000 jobs. And it added even less private jobs –just 99,000. Not to mention that the unemployment rate also ticked higher last month, up to 3.9% from 3.8% in September.
The labor market is the bedrock of the U.S. economy. And now it’s starting to crack, which means the economy is finally slowing.
And that is exactly what the Fed needs to see in order for it to end its rate-hiking campaign.
The sooner the Fed is done with rate hikes, the sooner it can cut rates. And the sooner it can cut rates, the sooner the economy can get back to “normal” – and stocks can enter a sustainable and healthy bull market.
The Final Word on the Latest Jobs Data
We’re confident we’ve just arrived at that point.
That’s why stocks had their best week of the year.
And it’s why this rally is likely here to stay – and make fortunes for those correctly positioned for it.
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