The bull market just turned 9 years old. However, it’s important to note that in 2011 we had a down year that would have been even worse if you exclude dividends. Also, in 2015, the stock and bond markets were down. It really depends on how you define the bull market. Bull markets technically don’t die of old age. Rather, they die from people making mistakes. So we will be watching this closely.
On Friday we had a really strong jobs number, which is a contributor of this strong economy. The top line number looks very good, but, that’s not necessarily what’s important. The important thing to look at is how people are getting paid. The wage growth was 2.6%, year over year. This number is good, but not great. If you add in the fact that people worked more hours that gives you just north of 4% growth in earnings. They earned more per hour and worked more hours. This is very good because it shows we are not at full employment. If that was the case, people wouldn’t be able to add more employees or working hours. This suggests that the unemployment rate is flat and people could continue to contribute to the economy.
There was an influx of 653,000 people that came back into the job market in the month of February. In addition to that, every sector grew, but government. The interesting thing to us is that 33% of the goods-producing industries grew. However, the tariffs could eventually slow this number down. It’s important to keep an eye on this to make sure tariffs don’t undue tax benefits and deregulation. Across aluminum and steel industries there is a large amount of input cost. We don’t want the tariffs to undue and slow job growth down by increasing input costs.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
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