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Astonishingly strong US jobs report sends stocks wavering

cnn.com

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Re: Astonishingly strong US jobs report sends stocks wavering

#11

Post by fassssst »

zdragnar wrote: post #8
techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

You should have read the article. The fear is that we are going to see yet another round of interest rate hikes to slow down inflation. Unemployment (according to the article) is also closer to 3% than 4 at the moment.

Low unemployment leads to inflation > fed raises rates to counteract inflation > stocks are less appealing

Therefore the stock market hates workers.

Re: Astonishingly strong US jobs report sends stocks wavering

#12

Post by lapcat »

lr4444lr wrote: post #10
techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

People employed can afford to buy stuff though, which also increases profit. The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases, which will hurt stocks.

> The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases

But there's a direct relation, because the Fed has been very explicit that they're worried about employment and wage growth, and they're raising interest rates in order to depress those.

The Fed operates according to the interests of the wealthy.

Re: Astonishingly strong US jobs report sends stocks wavering

#13

Post by mensetmanusman »

The wealthiest 10% of Americans own 90% of these stocks.

Most of you reading this are in the top 10%.

Stock prices are a game among the wealthy who haven’t demanded that workers should be paid more to lower the absurdly high corporate profits.

Re: Astonishingly strong US jobs report sends stocks wavering

#14

Post by toomuchtodo »

lapcat wrote: post #12
lr4444lr wrote: post #10

Earlier quoted context omitted.

People employed can afford to buy stuff though, which also increases profit. The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases, which will hurt stocks.

> The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases But there's a direct relation, because the Fed has been very explicit that they're worried about employment and wage growth, and they're raising interest rates in order to depress those. The Fed operates according to the interests of the wealthy.

Good luck to them. 10K boomers retire a day, there are less workers than jobs, and no benchmark rate will change that.

https://news.ycombinator.com/item?id=34601350

Re: Astonishingly strong US jobs report sends stocks wavering

#15

Post by whitemary »

lapcat wrote: post #7
Multicomp wrote: post #5

I can't read the article, so this is one of those shoot from the hip comments. With that health warning out of the way, I am surprised that a strong jobs report would sink stocks, unless those stocks expected to be able to get some benefit from a weak jobs report like slowing the increase in interest rates, or a cheaper labor market because there were lots of tech workers recently laid off and would therefore have do…

> unless those stocks expected to be able to get some benefit from a weak jobs report like slowing the increase in interest rates, or a cheaper labor market because there were lots of tech workers recently laid off and would therefore have downward pressure on their salaries? This is the point. The Fed has been very explicit lately that they've raised interest rates in order to depress wages. They said the quiet part…

The extent of denial about this is terrifying. I mean, the Fed literally gave that exact reason for the first rate increase. They could not have been anymore explicit.

Re: Astonishingly strong US jobs report sends stocks wavering

#16

Post by Ericson2314 »

zdragnar wrote: post #8
techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

You should have read the article. The fear is that we are going to see yet another round of interest rate hikes to slow down inflation. Unemployment (according to the article) is also closer to 3% than 4 at the moment.

Why are we fixing inflation that doesn't exist? Sounds to me like a scapegoat.

https://delong.typepad.com/kalecki43.pdf oh wait, the O.G. wrote about this 80 years ago.

Re: Astonishingly strong US jobs report sends stocks wavering

#17

Post by andsoitis »

techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

The reason you cite is not why stock prices are lower. The reason is in the 3rd bullet:

> US stock futures were lower Friday as Wall Street feared a still-hot economy could give the Fed more room to hike rates.

And more detail on this further down the article.

Re: Astonishingly strong US jobs report sends stocks wavering

#18

Post by looping__lui »

techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people earning the same irrespective of their capability, effort, working hours and “value creation contribution in the economy”? Isn’t income equality (government interventions in some aspects aside) a mere reflection of people’s contribution to a economy and their ability to negotiate? So, are you assuming/applying everyone more or less has the same contribution or do you want everyone to be paid the same irrespective?

Re: Astonishingly strong US jobs report sends stocks wavering

#20

Post by horsawlarway »

zdragnar wrote: post #8
techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

You should have read the article. The fear is that we are going to see yet another round of interest rate hikes to slow down inflation. Unemployment (according to the article) is also closer to 3% than 4 at the moment.

You seem to be saying essentially the same thing.

The fed has been pretty clear that it sees wage growth as a serious inflation problem (because it's sticky) and they're intentionally raising rates to force cuts to wages and employment.

Personally - I'm a little mixed, since I believe rates were far too low and have created a very strange economy where you have companies that never actually make money become household names (ex: WeWork, Carvana, Uber, Zillow, Pinterest, etc...) because they gobble up debt banking on some mythical future profits once they capture the market.

But on the other hand, I feel like the current stance of the fed - "raise the rates to stop hot employment and wage growth" - is a cop out. Inflation control is the second of their two mandates, employment is the first.

They could have been raising rates during good years before this to curtail some of the bubbles we're seeing, but instead they only chose to do it to protect businesses from wage growth. Which... feels a bit scummy, and much like they're protecting the wealthy at the expense of increasing wage equality.

---

Now, on the other hand - the market's reaction is not at all surprising, I agree that given what the fed is saying, this will likely push the balance back towards a larger rate hike, and the market is predicting that as well, and dropping to account.

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