For years, I have talked about the importance of paying attention to the market action rather than outside influences. The financial media, pundits, experts and noisy Twitter feeds are a distraction, especially now. If you listen to the market message, you’ll know that markets look strong.
Data points to a strong economic recovery
I don’t know how anyone in the media can be negative as the markets continue to rise. The data points toward a strong economic recovery from a pandemic-induced slump. Some real-time estimates point to a 6.5% growth rate during Q1 with more to come during Q2. Negative, indeed!
Last week’s jobs report showed robust growth not seen in many years. In fact, if you bundle February revisions with March, well over 1 million new jobs were created. Those numbers are not a one-off. The momentum is real, and we could see more strong job gains in the months to come. This is real data that is going to make a huge difference for the economy.
Markets look strong
The stock market sees the strong economic data as a positive, so no wonder new all time highs are happening right now. Will it slow down? Sure, eventually. But it’s a pleasant feeling to see job growth accelerating to the point where the economy could achieve some escape velocity. If the economy starts getting too hot and inflation starts getting out of control, the Fed will step in and rein in any excessive behavior.
All good stuff, right?
That’s why I want you to ignore the “glass half empty” mentality. Anyone who has said this experiment with flush liquidity is going to fail has been wrong so far. If you’ve been listening to the most accurate message – the one coming directly from the data and the markets – you’re not complaining. Keep on listening!