Why is the Stock Market Down 500 Points
The Tale of Two Markets
The stock market is currently in a downward spiral. As I write this, the Dow Jones has dropped by 500 points since 8:30 AM. The reason? A surprisingly strong jobs report.
This morning, the BLS released December's jobs report. The economy added 256,000 new jobs, far exceeding the 155,000 expected by market analysts and economists. Moreover, the data showed strong wage gains over the past year. Overall, wages increased by 3.9%, significantly higher than the 2.7% inflation rate. While this is all good news for labor markets, why is the stock market so glum?
It turns out that this strong report signals to the stock market that the Federal Reserve will probably put the brakes on future rate cuts. The stock market loves low interest rates, and this report has reduced the chances of that happening. Traders now give 97% odds that the Fed will not cut rates when they meet later this month.
Good news in one market, bad news in the other.
Here are some reels I have created over the past couple of days to explain what's happening in our economy. Make sure to follow on Instagram
Biden the Job Creator
Why Are Mortgage Rates Up?
Job Openings are up, but Hiring is Down!
