S&P 500 opened flat on Friday after the U.S. Bureau of Labor Statistics said non-farm payrolls increased way more than expected in December.

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Craig Johnson shares his view on S&P 500

U.S. employers added 216,000 jobs last month versus the Dow Jones estimate for 170,000 only, as per the press release.

Simply put, the labor market ended 2023 on a strong note. But it’s not great news for stocks because today’s data may create room for the Federal Reserve to skip a rate cut in March.  

Sharing his view on the S&P 500 in a recent CNBC interview, Craig Johnson – chief market technician of Piper Sandler said:

“We think we’re going to see this market consolidate for a while. It’s not going to be as much of a price stretch but more of a time correction.”

Unemployment stood at 3.7% in December

Craig Johnson expects even the “Magnificent 7” to underperform and become the “Lag 7” for a while.

In the meantime, he’s convinced the small and mid-cap growth names will “play a pretty meaningful catch up”. More broadly, the Piper Sandler expert foresees services and industrial companies doing well in the near-term.

Other notable figures in today’s data include unemployment at 3.7% versus 3.8% expected. Average hourly earnings were up 4.1% for the year and 0.4% for the month – both higher than estimates.

The employment report arrives only days after Fed’s Barkin said the possibility of a rate hike was still on the table as Invezz reported here.

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