The Dow, Nasdaq and S&P 500 are down this morning after a better-than-expected jobs report. That’s right, healthy employment numbers have caused a dip in the market. Traders appear to be more concerned with the Fed these days, and the robust report could mean there's no rate cut in the near future. William O’Neil’s Stephen Porpora can’t understand why everyone is so surprised. He appeared on "Squawk on the Street."
FYI: Nonfarm jobs increased by 167,000 in December (analysts expected 100,000), and the unemployment rate remained unchanged at 4.5%. But the one figure the Fed is really paying attention to – wage inflation – grew by 0.5%. That’s the largest monthly increase since a 0.6% jump in April. Labor costs are a top concern for the central bank because of their ability to boost inflation in the overall market.
Porpora says the Fed has warned of this all along, so he can’t understand the market’s negative reaction. Some are embracing the Fed’s perspective, though, so that’s making the market resilient.
Porpora noted that the past couple of days have seen the market slip after perceived negative Fed news and economic data, only to rally later in the day. “We’ll see if we can pull all that off today again,” he says.