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.

Friday's market reaction to the jobs report comes down to a simple premise: Bad news is good news, as long as it isn't too bad.— 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.Unemployment among Hispanic workers rises at faster pace in October than overall rate

"Investors who are eager for the Fed to be cutting rates should be careful what they wish for," Michael Arone, chief investment strategist at State Street Global Advisors, said in an interview earlier this week.

 

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