Last week ended with a thud as the jobs report did nothing to improve the mood on Wall Street after the Fed declined to reduce interest rates on Wednesday.
Maybe the markets are just deciding it is time to go on holiday like those in Europe.
Of interest to me, was the significant adjustment down to previous reports.
I am beginning to wonder if the blessings of AI may be actually coming with a shift in employment.
We already knew that public jobs were coming under the
knife and there have been continuous reports from tech companies of job layoffs.
The recently passed legislation has had little time to generate any new jobs and I am not sure what they will become.
Many of these factories will use robotics.
It seems like we are reliving the days of the industrial revolution where we will replace workers in one field with hope of moving to another.
My concern is whether we are prepared.
Whether we are or not, it is coming.
For all the concerns about the jobs report, one has to give the economy a check mark as the earnings reports have been positive in 85% of the cases.
That is not a home run but it is not a strikeout either.
Analysts will debate each and every issue but one thing that never is questioned is earnings.
The problem is forecasting what is coming next.
Markets are looking down the road at least six to nine months.
What will 2026 bring?
It is harder to project with such a volatile environment.
The debate rages as to the impact of tariffs.
To date it has been negligible.
It seems more like a back door tax as in a value added tax.
It has to make things cost more, but we have yet to figure out how much.
There are a multitude of concerns with wars in the Middle East and Ukraine.
Russia and China are a constant issue.
There is plenty to keep one up at night.
With all that, we have the next elections in sight.
It just seems though that this market is headed higher.
The real potential for great earnings still lie in the Mag 7.
Microsoft hit it out of sight and Netflix was it usual cash cow.
Nvidia continues to be ahead of everyone.
If there is a crack it might be in Amazon and Alphabet.
It appears though that the broader market may be catching up.
I can’t find a reason to become bearish at this point.
I am not going so far as to jump on the 7000 bandwagon for the S&P but it should go higher.
I will stick to taking a 7% dividend in UPS and be content.
Not glamorous, but it covers my green fees.
