Something doesn’t make sense about the current stock market boom. U.S. big caps keep soaring while the economic outlook keeps getting worse. Right now, the atmospherics, Big Momentum and AI euphoria, are winning over the negative news flow and daunting market metrics. But sooner or later the fundamentals will take charge, and then, watch out for flying glass.
On the macro scene, the danger signs are multiplying. The latest employment report from the Bureau of Labor Statistics disclosed that the U.S. added a meager 73,000 jobs in July, and revised the May and June figures radically downward, bringing total net hires for the past three months to just 106,000, less than one fourth the increase for the same period last year. Heather Long, chief economist at Navy Federal Credit Union, described the feeble data as a “game changer” demonstrating that “the labor market is deteriorating quickly.”
