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Astonishingly strong US jobs report sends stocks wavering

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Re: Astonishingly strong US jobs report sends stocks wavering

#81

Post by mogacom »

noobermin wrote: post #9

I feel like while there is a correlation between trends in the stock market and the general economy'a well-being, a lot of these kind of stories can be explained by remembering they are correlated but not perfectly. According to the article, this is on fears of fed interest rate hikes. It's easier to accept the stock market has it's own logic which may not necessarily mean what is good for the economy or not.

This is an important point. The title is implying not just correlation but causation. Often financial news articles are phrased differently to avoid this, for example using something like "amid strong US jobs report". Sounds pedantic but it's a subtly pernicious thing.

Re: Astonishingly strong US jobs report sends stocks wavering

#82

Post by kspacewalk2 »

dougmwne wrote: post #43
looping__lui wrote: post #18

Earlier quoted context omitted.

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 ea…

Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class. It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the suppo…

Inflation (but not hyperinflation) benefits people in debt, and hurts people with savings. Is having savings nowadays considered intrinsically less moral or something?

Inflation targeting of, say, 2%, is the balance that takes into account the sometimes competing interests of all these groups (savers, borrowers, wage earners, people who live off investments, etc). Deviation into either direction causes long-term structural problems.

Re: Astonishingly strong US jobs report sends stocks wavering

#83

Post by looping__lui »

KptMarchewa wrote: post #77
looping__lui wrote: post #18

Earlier quoted context omitted.

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 ea…

"The shift towards profitability" that made facebook lay off 11,000 people to save 1.5 billion to spend 40 billion on buybacks.

And their stock soared 25% yesterday because of their profitability. Are you trying to prove the point I’m making or just mad at me that I explain capitalism?

Re: Astonishingly strong US jobs report sends stocks wavering

#84

Post by hedora »

d23 wrote: post #25

I really hate financial headlines. The S&P is still up 3.08% this week . This headline makes today's 0.65% drop sound catastrophic.

In related news, annualized GDP growth from the start of the pandemic to the end of the recession panic was about 6% (~2x of normal).

Re: Astonishingly strong US jobs report sends stocks wavering

#86

Post by toiletfuneral »

looping__lui wrote: post #18
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 ea…

[dead]

Re: Astonishingly strong US jobs report sends stocks wavering

#87

Post by lapcat »

kolbe wrote: post #46
lapcat wrote: post #12

Earlier quoted context omitted.

> 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.

The only thing that really causes inflation is wage growth, and an observed phenomenon is that overall wage growth does not increase the living standards of workers anyway, because scarce necessities like housing will just increase at a high enough rate to capture all excess wages. On the other hand, the real consequence of wage growth is supply chain and staffing disruptions. If we could get wage growth without offs…

> The only thing that really causes inflation is wage growth

I'm truly stunned that you can say this after the pandemic.

Re: Astonishingly strong US jobs report sends stocks wavering

#88

Post by PragmaticPulp »

dougmwne wrote: post #43
looping__lui wrote: post #18

Earlier quoted context omitted.

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 ea…

Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class. It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the suppo…

> It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class.

You're forgetting the primary asset of the middle class: Housing.

People purchase housing with mortgages. Inflation raises the price of their home and diminishes the impact of their mortgage debt.

Inflation also helps people with a lot of college loan debt, which has furthermore been paused for many people. You'd rather pay of a hypothetical $50K of student loans after inflation (including wages) has made that $50K worth less.

I often think about the few people whose late 20s coincided with record low interest rates, the COVID pause on student loan debt, the extreme job boom where a little LeetCode would hand you a high-paying tech job, and the small window where home prices hadn't yet shot up. Anyone who lucked into the right combination of these factors would have set themselves up for a financial future that I could have only dreamed of in my mid-20s. It's not a large number of people, but I am jealous.

This isn't meant to be an "inflation is good" post, because out of control inflation is definitely not. However, it's not so simple as to say that only the wealthy see any benefit from inflation.

Re: Astonishingly strong US jobs report sends stocks wavering

#89

Post by time_to_smile »

skizm wrote: post #37

SPY and VTI are down like 0.65% right now and haven't even given up yesterday's gains. Plus a bunch of non-Meta tech companies missed on earnings yesterday. Come on.

I regularly keep up with financial news and it's hilarious how each morning financial reporters quickly rush together articles about " caused by ".

I really enjoy the pre-market opening reports, always trying to predict the direction of the market (usually based on the current futures direction) that are, as expected, wrong about half the time.

The best are when you can catch two contradictory headlines based on when they were published relative to market movements.

A stock movement that's within two standard deviations of typical price movements is very likely not the result of a single new piece of information.

Re: Astonishingly strong US jobs report sends stocks wavering

#90

Post by [deleted] »

988747 wrote: post #74
looping__lui wrote: post #64

Earlier quoted context omitted.

I’m not sure I follow your cynicism: I celebrate ICs making 500k or 1M working for a company in the US instead of making “the same with a PhD in physics as an assembly line worker at Volkswagen”. If an IC delivers 100MM in cost savings for a company because his software scales almost arbitrarily and gets paid highly: that’s a win for the working class population.

But that does not take into account VC-powered startups, like Uber, which never turned profit in their history, so that 500k-1M compensations for ICs are directly financed by VC money, which is unsustainable. I think that's what GP meant: the "superpower" to raise VC money is waning, and Sillicon Valey unicorns need to start operating like any other company, hence the layoffs.

[deleted]
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