All Good News, But...

All Good News, But... image

The State of the Market

Although the exchanges were shut on Friday, yet another important economic indicator came in well above expectations. In case you were otherwise occupied, it is worth noting that nonfarm payrolls accelerated in March by 916,000, which was well above the consensus estimate of 675,000. In addition, the prior two months were also revised higher, adding a total of 156,000 new jobs to the current totals. And the unemployment rate fell to 6.0% from 6.2%. All good news.

This is on the back of last week's update to the ISM Manufacturing Index, which came in at a 37-year high. The rebound from February’s winter storms, the vaccine rollouts, more economic re-openings, and expected additional support out of Washington appear to have all contributed to the recent improvement in the economic data.

To aptly sum up the current state of the economy, I'll borrow the words of CNBC's Mike Santoli, who wrote Monday, "the economy is revving hard right now."

Then when you consider that, according to data from Johns Hopkins, approximately 50% of the adult population in the U.S. has received at least one dose of a coronavirus vaccine, well, it's hard not to be optimistic about the outlook for a return to normalcy in the not-too-distant future. Also, good news.

As someone who has received two doses of the Moderna vaccine, I concur with the upbeat mood the economy looks to be in. Now that the odds of contracting COVID and/or the virus sending us to a hospital now quite small, my wife and I find ourselves looking forward to seeing family and friends - and returning to our travel schedule. And on that note, I can attest that there is indeed pent-up demand for travel - at least in my household!

So, am I surprised to see stock prices movin' on up again to new all-time highs this morning? In short, not at all. A rising market on the back of an improving economic and earnings environment (according to FactSet, analysts have boosted their EPS forecasts by 6% over that past three months and estimates for the calendar year 2021 are up 5%) makes sense.

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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning's opinions and viewpoints regarding the future of the markets should ...

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