Weak Jobs = Good News? Analysts Divided - Street Signs

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Mar.08

4:28 PM ET

Thursday, 8 Mar 2007

Weak Jobs = Good News? Analysts Divided

Posted By:Greg Levine

Topics:Interest Rates | Federal Reserve | Employment | Technology

Sectors:Technology

Unemployment is bad -- for the unemployed. But for investors, it might be another story. That was the bone of contention between Don Hays and Scott Wren, two investment strategists who joined "Street Signs" to debate the impact of jobs reports on the tech sector.

Hays, president and chief investment strategist at Hays Advisory, sees a tighter jobs market as a stimulus that will create a chain reaction -- leading to good news for the technology sector. As he explains it, the U.S. economy has "been in a cycle" since June 2004, with the Federal Reserve "tightening the noose" through higher interest rates. With a signal like falling employment, he says fiscal and monetary leaders will call for moves that will boost productivity -- like lowering rates. And in a "world entranced with productivity enhancement," Hays declares that "tech always leads the parade."

Wren, senior equity strategist at A.G. Edwards, sees it differently. He told CNBC's Erin Burnett that he's also "certainly bullish," and calls for "major indices" to rise between 8% and 10% higher than the close of 2006. But he insists that "tech doesn't look very good" -- and that a decrease in jobs will hinder, not help, the sector. The equity forecaster explained that as the U.S. is "entering a slowdown," businesses are simply "not hyped" for tech spending.