April 1, 2022, 10:53 am EDT
Strong Job Markets with Chaotic Environments
It is a weird combination of strong job markets with chaotic environments.
March added another 431K new jobs to nonfarm payroll with a low 3.6% unemployment rate. This economic data should be solid enough to paint a bullish picture. But, it mixes with many issues the world faces now:
- Russia-Ukraine War
- Inflation in energy, food, and all commodities
- Rising rate
- COVID-19 Outbreak and unstable social environment in China
The stock markets reflect this reality with wild actions of the 3-week rally and a -550 points drop in the Dow Jones index yesterday. Our opinion is that the positive news is going to fade away. The bad news is going to get worse. All major countries in the world including the US, German, France, Canada, Russia, China, India, Japan, and Korea, face similar problems of rising costs and shaky society. Especially, the Russia-China bond becomes stronger in dealing with its western counterpart (US, Euro). Confrontation is likely to get intense in the future.
As a result, economic issues will surface to affect business and job markets globally. Currently, this trend has been set. The rising-rate policy will make this process faster into a downward spiral.
Therefore, we focus on defensive types of investment since the beginning of 2022. Most likely, we still stick with this strategy for 2022 and 2023.