For February, the Bureau of Labor Statistics reported a 92,000 decline in employment. Stock markets did not anticipate a job cut that deep. Despite regular headlines of job cuts from Block (XYZ), Amazon (AMZN), and other firms outside of tech, investors ignored the warnings.
The S&P 500 (SPY) and Nasdaq (QQQ) fell by 1.33% and 1.59%, respectively. The job market mattered because of how the Federal Reserve would react to the data.
Weak job markets would increase the odds that the Fed would cut interest rates. But the war in the Middle East created a supply shock for oil. In addition to the consumer price index indicating higher prices, consumers must grapple with higher energy costs.
Investors who bought Enbridge (ENB), Canadian National Resources (CNQ), and TC Energy (TRP) will have plenty of regular dividend income and capital gains to offset inflation-related costs.
Markets avoided consumer goods companies that are likely to experience a steep drop in demand. Ford Motor (F) lost 13.77% last week. Even Tesla (TSLA), whose P/E is at a 370 times multiple, fell by 1.4% in the last week. Rivian (RIVN) held up, but Lucid (LCID) will likely trade below $10 in the coming months.
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