Bad news for the economy is good news for the stock market... as long as it doesn't get too bad

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Bad news is good news, as long as it isn't too bad.

Stocks rallied sharply after the Labor Department said nonfarm payrolls rose by 150,000 in October — 20,000 fewer than expected.

Traders work on the floor of the New York Stock Exchange on November 02, 2023 in New York City.Friday's market reaction to the jobs report comes down to a simple premise: — 20,000 fewer than expected but a difference attributable pretty much completely to the auto strikes, which appear to be over. "We've seen one or two head fakes in this direction before, but the fact that this report followed other weaker-than-expected economic data points this week may encourage investors who have been waiting for a less-hawkish Fed," he added.However, that cut could be the really bad news, as it likely would signal the Fed's concern that the economy is slowing so much that it needs a boost from monetary policy.

 

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