February 5, 2021, 10:20 am EST
US Job Reports
The US labor department announced its January non-farm job report of adding only 49K jobs. This number reflects the impact of COVID-19 where hotels, restaurants, entertainment, travel, retail, transportation, and constructions kept suffering negative numbers. However, professional services, including R&D, IT, consultants, added 97K. Combined with government jobs 43K, US job reports remain a small positive number.
Job report is the most important economic indicator for the US economy, in our opinion. Without solid and strong job growth, saying 200K-300K increase constantly, the US economy is not going to be sustainable for the long run even with stimulus and government support.
But, investors are still very optimistic because of COVID-19 vaccine availability. One strong sign is the hotels. For example, LVS, MGM, WYNN, MAR rose up quickly today to show high expectations that travel and gambling activities may be back in the future.
It is up to individual traders and investors to judge or guess the direction of the economy and stock markets. Our viewpoint is more on the conservative side toward slow growth or a stalled economy. However, some stocks can still grow under this environment and speculation like these hotels. So stay cautiously optimistic may be a reasonable strategy.