Jobs Report Good News for Equities, but Overlooks Housing Losses: Analysts
Scott Reeves
Mark Zandi, an analyst at Moody’s Economy.com, told “Squawk Box” that June’s unemployment numbers are good -- but not as strong as they look. But Vince Farrell, guest host and managing director at Scotsman Capital Management, thinks the figures are "fine" for equities.
“I don’t think the Bureau of Labor Statistics is capturing a lot of the job weakness in smaller firms, firms that are going out of business in a lot of the housing-related industries,” Zandi said Friday. “I think the numbers are okay, but they’re not as good as we think they are.”
U.S. employers added 132,000 new jobs in June, topping Wall Street’s consensus estimate of 120,000. In addition, the government said 75,000 more jobs than previously estimated were added in April and May.
“These numbers are fine for the equity market,” said Farrell.
He predicted that over the coming week, "What we’re going to see in earnings is the large-cap, multinational companies are going to do very well. The flight to quality in the stock market is going to be to the large-cap, low-multiple, high-dividend yield stocks.”
