On Friday, the March jobs report showed 303,000 new jobs created which was well above expectations of 202,000 once again. The unemployment rate fell to 3.8% while wages increased 4.1% over the past 12 months. The Goldilocks economy with elevated inflation continues to defy the odds and critics. One by one almost every single tried and true predictor of recession has flashed since 2021 with varying lead times until the economy shrinks. But someone forgot to tell the economy to stop growing.

The only economist I have heard explain this has been my friend, Jim Bianco, who forecast this would happen. In a nutshell, Jim’s argument has been that COVID structurally changed the economy to a degree that rendered most economic models as lazy or useless. Work from home wasn’t just a passing fancy and it has been difficult to model it. Continued kudos to Jim and his team for getting this right.

The stock market bounced back sharply on Friday as credit was given to the employment job. That’s just nonsense and this week will be a much bigger tell of what the month will look like. I think it’s going to be a tougher slog than it’s been with new highs being difficult to reach.

(Click on image to enlarge)

Volatility is also percolating which would be a negative for stocks. 16 is still historically low, but a move to 20 won’t come as a shock.

(Click on image to enlarge)

On Friday we sold levered S&P 500 and some levered NDX.

More By This Author:

Who Turned The Lights Out?
Two-Day Decline – No One Cares
New Week, Month And Quarter Begin – Back To Narrowness