“Right now, we’re in an environment where basically any piece of news can be taken as good news.” – 01:22
Steve Sosnick, Chief Strategist at Interactive Brokers, joins Remy Blaire to discuss the current economic landscape in the United States, particularly in light of the ongoing government shutdown. With Wall Street reaching new all-time highs, Remy highlights the absence of the September jobs report due to the shutdown, which has led to a reliance on alternative data sources. The episode begins with a review of the ADP report, which reveals a significant drop in private payrolls by 32,000, marking the largest decline in two and a half years. Additionally, August’s job figures are revised downwards, indicating a loss of 3,000 jobs.
They discuss the disconnect between the slowing hiring momentum and the rising stock market, with Steve noting that the current market psychology interprets news—whether positive or negative—as beneficial for stocks. He explains that the lack of jobs numbers removes one potential impediment for the market, allowing it to continue its upward trajectory.
The conversation shifts to the implications of the labor market for the Federal Reserve, as Remy and Steve explore how the absence of official economic reports complicates the Fed’s assessment of employment and price stability. Steve emphasizes the importance of jobs data in the Fed’s dual mandate and discusses the challenges of piecing together the economic picture with limited information.
As the segment progresses, Remy and Steve examine recent trends in various market sectors, including pharmaceuticals and chip stocks, which have seen gains. Steve points out that government involvement in these sectors, such as investments in companies like Intel and Pfizer, has contributed to their positive performance. He also notes the importance of diversifying investment interests beyond the crowded tech sector, encouraging a focus on fundamentals.