Seriously, are you worried about the July job reports? Well, you should not really be because according to expert analysis, you have reason to be more optimistic about the market since the July reports were better beyond expectations.
According to Art Hogan, chief market strategist at Wunderlich Securities, stocks were still enough to attract investors despite the fact that S&P 500 was hitting a new all-time day high of 2182.34 on Friday.
In an interview to CNBC’s Power Launch, Hogan went on to say that he was of the view that the earnings cycle in this quarter is to be seen as an inflection point. Positive earnings growth is expected ex-energy. With revenue going in the positive direction, Hogan hoped that the second half was going to be better than the first half.
Investment strategist at Edward Jones, Kate Warne held the same views as Hogan and stated that if the oil prices either remain stationery or increase in the days to come, there was even stronger likelihood of growth of positive earnings. On Friday, the West Texas Intermediate Crude stabilized at 13 cents lesser, that is at $41.80 per barrel.
U.S Economy has been brilliant in these times when it comes to granting jobs. In fact in July, it gave out 255,000 jobs compared to economists’ expectations of not more than 180,000. Even then, Warne was of the view that this does not necessarily mean that the interest rates will be increased by the Federal Reserve. She said that the rate hike was not expected until the end of the year, even if economic data continues to show positive trends.
Others like Bens Willis, managing director of Princeton Securities Group, were of the view that jobs report should not be this strong this year again, so that the market is able to go through its natural correction of process of being overbought. This is what he told “Closing Bells”, when he was asked of his opinion on the matter.
Bill Lee, head of North American economics at Citi, said that the key metric is still inflation, and so far, there are no signs that indicate that inflation is going up significantly. He also said that more data needs to be seen before the interest rates are increased.