Last Friday, the Bureau of Labor Statistics posted an increase in employment in December. Seasonal retail holiday hiring lifted retail trade. Health care and government benefited from notably strong hiring. In response to the hiring spree, investors should hold companies in those sectors.
In health care, watch six companies. These four drug companies - Merck (MRK), Bristol-Myers (BMY), AbbVie (ABBV), and Biogen (BIIB) - should thrive. Biotech companies in the gene editing space like Crispr (CRSP) and Intellia (NTLA) indirectly benefit from the strong labour market in health care. Still, NTLA and CRSP stock are in a downtrend as traders book profits. Wait for the sell-off phase to end.
The strong government job growth implies strong business ahead for their suppliers. For example, governments will continue to increase the military and defense industry spending. L3Harris (LHX), Lockheed Martin (LMT), and RTX (formerly Raytheon) are poised to post strong growth for the nextx few years.
Although jobs fell in transportation and warehousing (-23,000), markets are already prepared for it. FedEx (FDX) and UPS will show weak shipping volumes in the current quarter. Rising shipping costs will hurt demand and lower activity. Although Zim Integrated (ZIM) is up on short covering, it is not an appealing stock to hold for the long term. Shipping rates are volatile.
