The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Surprise surprise.
Well the labor market surprised very strongly (+130k vs +65k est & +48k prior revised from +50k). Fed easing expectations and a concern about recession flew out the window. S&P futures jumped, Treasury yields jumped, and the Dollar jumped. The S&P opened around +50 but began to fade immediately. The index went negative within 45 minuts and bounced shortly thereafter. It spent the rest of the day bumping along, slightly higher. Interestingly, yields and the Dollar exhibited a similar trading pattern over the day. The initial pulse from the nonfarm payrolls was reversed in the morning and trading settled in the afternoon, at levels slightly higher than pre-labor release.
As surprising as the labor market data was, it keeps the long-standing narrative going. The economy is healthy and chugging along. That narrative was just starting to show some cracks with the recession-worries popping up here and there. The expected weak labor data was a reflection of that. However for the latter half of 2025, a healthy and stable economy was the foundation for bullish sentiments. So here we are, back where we were. Does this suggest the same bullish outlooks will step forward? Does this suggest the same bullish forces will return?
I think yes. I think it’s just that simple. The economy is on rails and without a negative shock, the trend is your friend.
We’ll see what twists and turns come but if the headlines are tame, I think we’re continuing higher.
See you tomorrow.
-Mike
Visdom Market Commentary
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