Inflation fears are stoking volatility in stocks but they’re unlikely to derail the market rally, says UBS

NYSE traders
  • A jump in US inflation will stoke bouts of volatility in the stock market but it’s not likely to stop the overall rally, says UBS.
  • Consumer price inflation for April soared by more than expected, to a rate of 4.2%.
  • “We think that the reflation trade has further to run, UBS said Thursday.
  • See more stories on Insider’s business page.

US inflation rates are flying up and worries about an acceleration in prices ranging from airline tickets to energy have knocked stocks off their record highs, but those fears are unlikely to derail the overall rally in equities, wealth manager UBS said Thursday.

The “latest volatility does not come as a surprise. But we also don’t see it as signaling an end to the bull market,” Mark Haefele, chief investment officer of global wealth management at UBS, wrote to clients.

The arrival of April’s Consumer Price Index confirmed months of caution from economists who said stronger inflation was on the way, a reflection of ongoing economic recovery from the COVID-19 pandemic. The higher-than-expected headline and core inflation readings drove stocks sharply lower Wednesday.

Market pricing of the inflation outlook also stepped higher, said UBS, noting the US 10-year breakeven rate moved to imply an average inflation rate of 2.56%, close to the highest level since 2013 and up from 2% when 2021 got underway.

The CPI data triggered Wednesday’s selloff in stocks that left the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average each down by at least 2%, with the Dow industrials tumbling 682 points.

“The latest rise in inflation, in our view, reflects year-over-year comparisons, which will fade,” he said. “While raw material prices may climb further, we believe the bulk of the rise in commodity prices is now over. In addition, labor supply headwinds should ease in the next few months once schools fully reopen, vaccinations continue to rise, and supplemental unemployment benefits expire.”

The CPI jumped to 4.2% from a year earlier, the largest increase since 2008, and core inflation, which strips out volatile energy and food prices, surged 0.9%, the largest one-month climb since 1982.

The UBS wealth management chief said it was important to note that major central banks have indicated they will not tighten policy in response to a temporary increase in prices. He outpointed that Federal Reserve Governor Lael Brainard said Tuesday the Fed will be “patient” as an inflation surge looks transitory.

“As inflation uncertainty persists, and as economic reopening remains on track, we think that the reflation trade has further to run. Our preferences include small-caps, financials, energy stocks, commodities, and emerging markets,” said Haefele.

Investors on Thursday appeared to set aside inflation worries, with Wall Street’s key stock indexes riding up roughly 1% each after weekly jobless claims hit another pandemic-era low.

Read the original article on Business Insider

History shows ‘sell in May and go away’ might be a good idea for S&P 500 investors, DataTrek says

Stock Market

Based on the S&P 500’s historic performance, the old adage “sell in May and go away” might be a good idea for investors this year, DataTrek said in a note on Wednesday.

The S&P 500 has seen total returns grow by over 10% year on year for the past two years and is currently up 10.5% year on year in 2021. Looking back through history however, there have only been five instances where year-on-year growth has exceeded 10% for three consecutive years. These have mostly been at pivotal times like the war, or the biggest bull market run on record, DataTrek said.

“Sell in May and go away” is based on historical stock performance that shows momentum in the markets generally slows down and produces lower returns over the summer months. The pattern has, however, been inconsistent in recent years.

Should what DataTrek calls “the curse of the third 10 percent year” hold true, reducing portfolio exposure to US equities might therefore be a good idea for investors right now.

“To buy or hold the S&P 500 right here, you need to believe other investors believe there’s another 10 percent coming in the next 12-18 months,” DataTrek co-founder Nick Colas said in the note.

The current market environment may be comparable to wartime market scenarios, but it also seems unlikely that markets will get earnings expectations wrong three years in a row due to their efficiency in valuing stocks, DataTrek said.

“We’re still of the mind that earnings expectations will continue to climb, and companies will be able to beat those elevated expectations because 1) American consumers’ ability and desire to spend is extremely high and 2) companies have underappreciated earnings leverage,” Colas said.

“As that story continues to develop, investors will grow to believe in another +10 percent year in 2022, and 2021 will see a continued rally. That’s what you have to believe to stay long the S&P 500 here; no other explanation really works,” he said.

On Wednesday morning, S&P 500 futures were down 0.4% after a broad equities sell-off hit markets earlier in the week as investors continue to worry about inflation and nervously await consumer price index data due to be released on Wednesday.

Despite the drop, stocks are still trading at record highs that were reached earlier this month.

Various major banks have also been hesitant to recommend the “sell in May and go away” strategy. JPMorgan’s quant guru Marko Kolanovic instead suggested to “buy in May and go away,” arguing the economic reopening would overpower the historical idea that markets slump over the summer.

“If you are tempted to reduce US equity exposure right here, right now, history is certainly on your side,” DataTrek’s Colas said.

Read the original article on Business Insider

Tech stocks need to overcome these 5 walls of worry to prevent a further 7% decline, Fundstrat’s Tom Lee says

NYSE trader
  • The decline in technology stocks has more room to go if five walls of worries aren’t overcome, Fundstrat’s Tom Lee said in a Tuesday note.
  • The Nasdaq 100 could drop a further 7% to its 200-day moving average, Lee said.
  • These are the 5 “wall of worries” tech stocks need to overcome to prevent further downside, according to Fundstrat.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The high-flying technology stocks that dominated returns in 2020 have seen their fortunes reverse so far this year amid a “violent rotation” into cyclical stocks, and there could be more downside ahead according to Fundstrat’s Tom Lee.

In a Tuesday note, Lee warned that the tech-heavy Nasdaq 100 could drop as much as 7% to its 200-day moving average if it doesn’t overcome five “wall of worries.” The index’s 200-day moving average currently stands at 12,438.

“Essentially, growth needs favorable outcomes on 5 of 5 ‘wall of worries’ to avoid further downside, [while] epicenter only needs a favorable outcome on 1 of 5 to work,” Lee explained.

Those walls of worries include inflation fears, higher interest rates, regulation from the Biden administration, a reopened US economy, and an increase in the capital gains tax rate.

“The outcome of these 5 events shifts the balance in favor of one group or the other,” Lee said, adding that epicenter stocks only need a few things to work while tech needs all 5 events to work in its favor due to crowded positioning among investment managers.

A rise in inflation, interest rates, and capital gains taxes would benefit epicenter stocks tied to the physical reopening of the economy relative to technology stocks, Lee said. And increased regulation would hurt mega-cap tech stocks. Finally, because most unrealized capital gains are in technology stocks, a hike in the capital gains rate could spur selling as some investors may seek to lock in a lower tax rate.

And if the Nasdaq 100 gravitates to its 200-day moving average, “there will be a panic out of growth stocks,” Lee said. That’s why Lee recommends investors cut their exposure to tech stocks in half relative to the S&P 500.

“In simple terms, we are saying to cut technology holdings in half and allocate this to epicenter sectors,” Lee said, adding that there is urgency to his message. With technology and the FANG mega-cap tech stocks representing 39% of the S&P 500, Lee recommends clients assign just a 19% weight to the sector.

But in the long-term, Lee sees plenty of upside ahead for the tech sector, and believe bargains will be available if the current decline continues.

Lee said in an interview with CNBC on Tuesday that investors should look at companies tied to the supply chain like semi-conductor equipment manufacturers, and believes that the technology sector will ultimately make up 50% of the S&P 500, “if not more” five years from now.

Read the original article on Business Insider

Cboe files with the SEC to list Fidelity’s bitcoin ETF as the number of firms seeking approval grows

GettyImages 942027334

The Chicago Board Options Exchange has applied with the US Securities and Exchange Commission Monday to list Fidelity’s Wise Origin Bitcoin exchange-traded fund, according to a Form 19b-4.

Fidelity in March applied to launch an ETF to track the performance of bitcoin. The fund will hold bitcoin and value its shares based on prices from major cryptocurrency exchanges such as Coinbase and Bitstamp, according to a regulatory filing.

Cboe’s acknowledgment to be Fidelity’s exchange partner moves the application process with the SEC, CoinDesk first reported.

An exchange partner such as Cboe BZX Exchange or the New York Stock Exchange is necessary to file a Form 19b-4. Only then will the SEC review the application.

The agency will now have to respond with a decision to reject or accept the application within 45 days. The SEC has 240 days to evaluate the application in total.

The SEC in the past has rejected every cryptocurrency ETF that has applied, which now total to nearly a dozen.

Most recently, asset manager VanEck applied to launch an ethereum ETF. The VanEck Ethereum Trust would list shares on the Cboe, according to an S-1 filing.

VanEck and the Cboe are waiting for the SEC to render a decision on whether it can list a bitcoin ETF, which the asset manager applied for in March. The regulator delayed a decision until at least July 17.

Still, experts believe that with the SEC’s new chairman Gary Gensler, who used to be an MIT Sloan School of Management professor teaching blockchain technology, the US will soon have its first-ever cryptocurrency ETF.

“I feel like it’s inevitable. It’s no longer ‘if’ but ‘when’ and I think the question of when is probably in 2021. That’s my prediction,” Dante Perruccio, president international of Wave Financial, a US-regulated digital asset manager, told Insider.

In Canada, the first publicly traded ETF, the Purpose Bitcoin ETF, has been approved, as well as ethereum ETFs. Brazilian regulators have reportedly approved two bitcoin ETFs.

The surge in interest in cryptocurrency ETFs rides on the skyrocketing prices of cryptocurrencies. Bitcoin this year has climbed 95% year to date, ether 380%, and dogecoin around 13,000%.

Read more: Fundstrat’s head of digital assets research walks us through his $100,000 and $10,500 year-end price targets for bitcoin and ether – and shares the 8 tokens he’s bullish on

Read the original article on Business Insider

Nasdaq tumbles 2% as inflation fears continue tech-fueled market sell-off

Trader NYSE
Traders work on the floor of the New York Stock Exchange shortly before the closing bell as the market takes a significant dip in New York, U.S., February 25, 2020.


US tech stocks continued their decline on Tuesday as fears of rising inflation persisted among investors. The Nasdaq fell more than 2% on Tuesday, adding on to its Monday decline of 2.55%.

Fueling the surge in inflation expectations has been the actual surge in commodity prices, such as lumber, oil, and copper.

This week’s stock market decline hit high-flying tech stocks the most, with shares of Tesla down as much as 13% since the start of the week. Cathie Wood’s ARK Invest flagship ETF was also being sold heavily by investors, as it fell 10% since Monday.

Here’s where US indexes stood at the 9:30 a.m. ET open on Tuesday:

Virgin Galactic, the pre-revenue space tourism company that seeks to launch paying customers into space, fell as much as 21% after its first-quarter earnings report revealed an uncertain flight schedule as it deals with maintenance issues for its spaceship.

Palantir fell as much as 9% after its first-quarter earnings report failed to impress investors. And decline auto sales in China for Tesla led to a sharp decline in the stock on Tuesday.

The price of dogecoin briefly surged as much as 20% after Tesla CEO Elon Musk ran a poll on Twitter to see if the electric vehicle manufacturer should accept the meme-inspired cryptocurrency as a form of payment. Tesla currently accepts bitcoin as payment for its products.

Oil prices were lower. West Texas Intermediate crude fell 1.4%, to $63.99 per barrel. Brent crude, oil’s international benchmark, dropped by 1.3%, to $67.42 per barrel.

Gold fell 0.7%, to $1,825.90 per ounce.

Read the original article on Business Insider

Goldman Sachs outlines the 3 biggest risks facing mega-cap tech juggernauts right now – and explains why regulation is the scariest prospect of all

Trader NYSE
A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 5, 2020.

  • Potential policies from President Biden’s administration represent big risks for mega-cap tech stocks, according to a note from Goldman Sachs.
  • Higher corporate and capital gains tax rates could reduce profits and spur a sell-off by investors who are sitting on big gains, the note said.
  • “The greatest fundamental risk to the continued market leadership of the five largest companies appears to be the potential intervention of regulators,” Goldman said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Mega-cap tech stocks like Facebook, Apple, Amazon, Microsoft and Alphabet face growing risks as President Joe Biden moves forward with his agenda, according to a Friday note from Goldman Sachs’ David Kostin.

Those five stocks represent more than a fifth of the S&P 500 as measured by market value, and for good reason, according to Kostin. The tech giants posted strong growth amid a global pandemic and their underlying revenue streams remained durable as other businesses struggled.

And while valuations appear stretched for the mega-cap tech stocks, fast growth and low interest rates justify them, according to Kostin.

But there are three big risks that these tech stocks are facing over the next year, which could lead to limited upside ahead from current levels, Kostin said.

1. Higher Taxes

Tax reform plans from the Biden administration could dent profits and spur selling by investors, according to Kostin.

Biden has proposed raising to corporate tax rate to 28%, though has signaled that a compromise around the 25% level is possible. That tax hike could decrease 2022 earnings for the mega-cap tech group by 9% relative to analyst estimates, according to the note.

A higher capital gains tax rate in 2022 could also lead to weakness in the tech stocks, as some investors who are sitting on big gains might sell in 2021 to lock in the lower current tax rate.

“The FAAMG stocks have appreciated by $5 trillion during the last 5 years, accounting for 29% of the S&P 500 market cap increase during that time,” Kostin explained.

2. Higher Interest Rates

Low interest rates have supported the valuation of high growth, long duration stocks for more than a decade as investors have learned to cope with near-zero interest rates.

But the trend of near-zero interest rates could be nearing its end, based on expectations from strategists at Goldman Sachs. The bank expects the yield of the 10-year US Treasury will rise to 1.90% by the end of 2021, representing a cycle-high since the pandemic began.

“All five FAAMG stocks have above-average duration compared with the Russell 1000, meaning they are especially sensitive to moves in long-term interest rates,” Kostin explained.

This dynamic was on full display in late 2020 and earlier this year. When interest rates rose sharply from November through March, FAAMG stocks underperformed the S&P 500 by seven percentage points.

“A similar period of rising rates in 2H 2021 would likely hamper FAAMG returns,” Goldman said.

goldman stock.JPG

3. Anti-trust Regulation

“Looking forward, the greatest fundamental risk to the continued market leadership of the five largest companies appears to be the potential intervention of regulators,” Kostin said.

Recent appointments made by the Biden administration suggest there is increased risk of a stricter regulatory regime for the FAAMG stocks, as they “face a laundry list of legal battles and investigations over their market power and competitive practices ranging from commercial litigation to DoJ and FTC antitrust lawsuits to Congressional probes,” the note said.

But investors don’t seem to be worried, as shares of Alphabet and Facebook are both higher since the announcement of higher scrutiny of their business practices.

Goldman said investors could be right, and that any antitrust actions have little to no major impact on the companies, but for now the uncertainty remains a big risk for the companies.

gs google chart.JPG
Read the original article on Business Insider

Ethereum’s path to $40,000, plus 5 stock picks from Baillie Gifford

Hello everyone! Welcome to this weekly roundup of Investing stories from deputy editor Joe Ciolli. Please subscribe here to get this newsletter in your inbox every week.

2021 02 08T000000Z_559438295_RC2MOL9MK63A_RTRMADP_3_CRYPTO CURRENCY FLOWS.JPG

Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through what’s been happening in markets. Here’s what’s on the docket:

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at jciolli@insider.com or on Twitter @JoeCiolli.


How Ethereum could hit $40,000

NYSE_James.JPG

James Wang is a crypto investor who covered artificial intelligence for Cathie Wood’s Ark Invest. In an interview, he shared how he first invested in crypto and breaks down his bull case for ether. Wang also laid out a valuation framework that explains how the red-hot cryptocurrency could eventually reach $40,000.

Read the full story here:

Ex-Ark analyst James Wang breaks down his bull case for Ethereum as its token breaches an all-time high of $3,300 – and explains why it could eventually reach $40,000


Stock picks from a Baillie Gifford manager who returned 125% in 2020

Bujnowski, Dave

Dave Bujnowski is an investment manager for the $144.9 million Baillie Gifford US Equity Growth fund, which returned 125% in 2020. Despite growth stocks’ surge in value, Bujnowski thinks investors should look at them now more than ever. He shares 5 stocks set to benefit from the end of the pandemic and a hyperconnected economy.

Read the full story here:

Dave Bujnowski beat 99% of his peers to return 125% last year. The Baillie Gifford investor shares 5 stocks set to benefit from the end of the pandemic and a hyperconnected economy.


2 DeFi trends, plus the bull case for Polkadot

Coins of the cryptocurrency Ethereum stands on a table

Digital-asset VC firm KR1 was an early investor in Ethereum, whose token hit a series of record highs this past week. The founders are now making a big bet on crypto protocol Polkadot and shared their investment case. They also broke down their outlook for DeFi, as well as two projects and key trends to watch.

Read the full story here:

A crypto VC firm that made an early investment in Ethereum is betting big on Polkadot. The founders explain why dot could overtake ether – and flag 2 promising DeFi projects that should be on your radar.


Attend our live virtual event

Mastering your personal finance can feel overwhelming, but creating strong financial habits and building wealth starts with just a few simple steps – awareness, proper planning, thoughtful action, and consistent habits.

For more tips, tricks, and best practices on your path to financial success, tune in Tuesday, May 18 at 12 p.m. ET for a free, hour-long virtual event, “Master Your Money: How to set yourself up to build wealth.”

Register here.

how to set yourself and build weath mym with fidelity


Stock pick central

Seeking experts who are willing to name names? Look no further:

Read the original article on Business Insider

Dow, S&P 500 close at record highs after dismal jobs report gives Fed more breathing room

trader, NYSE
  • The Dow Jones and S&P 500 closed at record highs on Friday after a weak April jobs report gave the Federal Reserve breathing room to continue with its easy monetary policies.
  • April saw an addition of 266,000 jobs, well below the estimates forecast of 1 million.
  • The April jobs report represented the worst miss since 1998.

The Dow Jones and S&P 500 closed at record highs on Friday after a weak April jobs report led to investors bidding up popular stay-at-home stocks that have performed well during the pandemic. The Nasdaq led the markets higher, but failed to reach new records.

April saw an addition of 266,000 jobs, well below the estimated forecast of 1 million. Unemployment rose to 6.1% from 6.0%. Economists had expected the rate to fall to 5.8%. The jobs report represented the worst miss since 1998.

The report likely gave the Federal Reserve more breathing room in continuing with its easy monetary policies, with regards to keeping interest rates low and its $120 billion monthly bond purchases.

While the Nasdaq 100 jumped following the release of the April jobs report, the Dow Jones moved lower as cyclical stocks tied to a reopened economy were out of favor.

Here’s where US indexes stood at the 4:00 p.m. ET close on Friday:

Square jumped 6% following its first-quarter earnings report, which surpassed analyst estimates. The company saw its bitcoin revenue jump 1,000% to $3.5 billion, and disclosed that it’s the third-largest corporate holder of the cryptocurrency.

The surge in bitcoin interest has led to banks opening up new business divisions to gain exposure. A report said Citi is planning to launch its own crypto trading services, and Goldman is also launching a cryptocurrency trading desk.

A bitcoin ETF launched three weeks ago has already attracted $832 million in assets under management, as the crypto craze continues.

Since the announcement of divorce between Bill and Melinda Gates, more than $5 billion worth of stocks have been transferred to Melinda from Bill Gates’ Cascade Investment holding company.

Tilray jumped 10% on a double upgrade from Jefferies, which said its merger with Aphria was a “perfect” match.

Oil prices rose modestly. West Texas Intermediate crude was up 0.05%, to $64.73 per barrel. Brent crude, oil’s international benchmark, increased by 0.01%, to $68.10 per barrel.

Gold jumped to its highest price since February, rising as much as 1.5%, to $1,842.59 per ounce

Read the original article on Business Insider

3 Chinese telecom carriers will be delisted from NYSE after losing appeals over a Trump-era investment rule

AP21006557939503
Staff members use their smartphones at a China Mobile display during the PT Expo in Beijing Oct. 14, 2020.

  • Shares of three Chinese telecom companies will be delisted from the New York Stock Exchange, The Wall Street Journal reported.
  • The appeals of China Mobile, China Unicom, and China Telecom against being delisted were rejected.
  • The ban was introduced during the tail end of the Trump administration.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of three major Chinese telecom carriers will be delisted from the New York Stock Exchange after their appeals against being delisted were rejected, based on separate filings in Hong Kong, The Wall Street Journal reported Friday.

China Mobile, China Unicom (Hong Kong), and China Telecom all said they expect the NYSE to request permission from the Securities and Exchange Commission to delist their American depositary receipts. This will take effect 10 days after the SEC is informed.

Former President Donald Trump on November 12, 2020, issued an order barring investments in publicly traded companies that the US government believes are owned or controlled by the Chinese military.

There had been a period of some back and forth, with the NYSE at one point reversing its decision before saying it would go ahead with the move to delist the shares. But when Joe Biden took office in January, the three companies asked the exchange to revisit its decision.

Trading of the American depositary receipts – securities that allow US investors to trade in foreign companies – of all three companies has been suspended since January 11.

But investors can still exchange those ADRs for shares by returning them to the Bank of New York Mellon, according to The Wall Street Journal.

The November order prompted index makers including FTSE Russell and MSCI to cut a dozen Chinese companies on the list from their benchmarks.

The Holding Foreign Companies Accountable Act, signed into law in December 2020, will require certain foreign companies identified by the SEC to disclose their shareholder information. This puts some Chinese companies at risk of being delisted as China in the past has been known to refuse the US Public Company Accounting Oversight Board to audit Chinese firms, often citing national security concerns.

The SEC in March said non-compliance for three consecutive years will get companies kicked off from the NYSE or Nasdaq.

Read the original article on Business Insider

Why the horrid April jobs report was actually great news for stocks

NYSE trader
  • The April jobs report badly missed estimates on Friday, but the stock market promptly hit record highs anyway.
  • That’s because the market is now in a phase where bad economic news is good news for equities.
  • The biggest fear for investors is an inflation spike that prompts the Federal Reserve to tightening monetary policy sooner than expected. The weak jobs report soothed those worries.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bad economic news is now good news for the stock market, as Friday’s horrid April jobs report translated into record highs for the S&P 500 and a spike in tech shares.

April saw an addition of 266,000 jobs, well below the estimated forecast of 1 million. Unemployment rose to 6.1% from 6.0%, bucking expectations for a decline. It was the worst miss since 1998.

But instead of an instant drop in stocks following the April jobs report, the tech-heavy Nasdaq 100 soared more than 1%. And while the more economically sensitive Dow Jones industrial average initially sold off, it quickly reversed into positive territory.

The centerpiece of this apparent disconnect is inflation, which is the biggest risk facing stocks right now, according to a recent Bank of America survey. The worry is that significant rise in inflation will prompt the Federal Reserve to tighten its easy monetary policy, which has long driven bullish sentiment in stocks.

But the significant labor-market weakness indicated by the April jobs report has investors shrugging off inflationary concerns for now. In fact, investors seem to have been emboldened to pile further into tech stocks, which carry the highest and most daunting valuations in the market.

This same dynamic was on full display earlier this week – albeit in inverse fashion – after Janet Yellen’s comments about interest rates needing to eventually rise caused a similarly sharp sell-off in tech stocks.

Going forward, now that the economy doesn’t appear as red-hot as many have thought, inflation expectations decline further. That could, in turn, give the Fed more breathing room to continue its monthly bond purchases of $120 billion and keep interest rates near 0%.

April’s jobs report gives credence to Fed Chairman Jerome Powell’s committment to not even talk about talking about tapering its monthly bond purchases or raising interest rates. Instead, Powell would like to see a string of reports that solidify the idea that inflation is consistently running above its average target of 2% and the economy is near full employment.

Read more: ‘If lumber crashes, stocks might be next’: An award-winning portfolio manager who’s tracked lumber prices for years breaks down why futures hitting a record high of $1,600 is an ominous sign – and shares what investors can do ahead of the eventual crash

There are varying explanations for why more Americans are not rushing back into the job market. The president of the US Chamber of Commerce called for the end of the $300 supplemental unemployment insurance on Friday, arguing that government stimulus programs have disincentivized employees to return to work.

But Fundstrat’s Tom Lee thinks instead, Americans are afraid to get back to work given that the COVID-19 pandemic has yet to be eradicated.

“Many people are still unwilling to ‘risk their lives’ to get a job given COVID-19 fears,” Lee said on Friday.

Whatever it may be, if the weak jobs reports continue, it could result in a jump in wage inflation as businesses are forced to pay top-dollar for workers.

But for now, as evidenced by Friday’s move in the stock market, bad news is good news.

Read the original article on Business Insider