The weak July nonfarm payrolls (reported decline of 23,000 jobs, with downward revisions to prior months, and unemployment at 4.1%) helped lower expectations for near-term Federal Reserve rate hikes and supported risk assets but US stocks futures are mixed in pre-open. Slower nonfarm payroll data and softening jobs figures have reinforced expectations that the Federal Reserve will hold or ease rates, supporting equity valuations.
When I look at the nonfarm payrolls the trend is down. Nonfarm payrolls have been declining every month since March, could this be the result on AI adoption? I can ‘t say this is due to AI as we are in the early adoption but in the longer term there is no doubt that AI will reduce the number of jobs so we could have a strong economy (GDP) and weak employment.
Despite the weak employment report the 10Y yield has hardly moved down, it shows that yields are resilient and supported by other factors that are not going away. As long as we are in this situation (resilient yields/yields making new highs), the stock market will face head winds. However I believe we are in a bull market any decline should be seen as a correction in a bull market.