Jobs Data Reaction: S&P 500 Nears Record Highs On Hot Jobs Data

Cameron Dawson, CFA, CIO at NewEdge Wealth joined Benzinga's Premarket Prep team to discuss today's jobs report.

Transcript

00:00All right, Cameron Dawson, Chief Investment Officer over at New Edge Wealth. Cameron,

00:04how are you doing on this Friday morning? Good, good. Good to see you guys.

00:09Ah, we got you in the New Edge Wealth office today, so you're not on the road again. So

00:15you just heard us bantering back and forth, staring at the bond market here,

00:20but the equity is holding up well. I know you do thoughtful long-term analysis here,

00:25but what's your initial reaction here to the jobs number?

00:28Well, we've been thinking that we've been in this world where good news is good news,

00:32bad news is bad news, full stop, which just means that a bad print, even if it means that

00:37the Fed is going to be cutting interest rates more, is not necessarily going to be received

00:42well by risk assets, given where their price, given where valuations are, given where earnings

00:47estimates are. But that good news, effectively what the Fed has been telling you is that they

00:52want to cut rates regardless of what the data does, as long as it doesn't mean higher inflation,

00:57which just means that if you get steady growth, if you get this resilience in the labor market,

01:02they're still talking about getting to neutral, and neutral based on their current estimate is

01:08a lot lower than where we stand today. Now, I think a report like this raises the point

01:14of a question of where is neutral actually, meaning that is the neutral rate further up than

01:20what is currently being forecasted because this economy is being so resilient to your earlier

01:25points, even with interest rates being where they are today. So it does raise this question of how

01:31deep the Fed will go this tightening cycle, or sorry, this easing cycle, if we continue to see data like this.