In this week’s episode, Ryan Detrick, Chief Market Strategist, reports live from the bustling Sixth Street in Austin while Sonu Varghese, VP, Global Macro Strategist, holds down the fort in a much quieter spot. Despite the market noise—both literal and financial—there’s actually some good news to share. From a surprisingly resilient labor market to a hopeful bounce in the S&P 500, Ryan and Sonu break down what’s working in the economy right now, why we’re not headed for a crash just yet, and what investors should keep in mind as volatility continues.
Key Takeaways:
- Labor Market Holding Strong: The U.S. economy added 177,000 jobs last month, and the 3-month average remains strong at 155,000 jobs. This level is enough to keep pace with population growth, contributing to a steady unemployment rate at 4.2%.
- Prime-Age Employment Impresses: The employment-to-population ratio for workers aged 25–54 rose to 80.7%, higher than any point during the 2010s expansion.
- No Crash = No Cuts (Yet): A resilient economy means the Fed likely won’t be cutting interest rates soon—but that’s a challenge for another day.
- Market Resilience: The S&P 500 recently bounced back from a near-bear market (down about 19%). Historically, in all 16 prior instances where the market recovered half its drop, it was higher one year later every single time.
- Negative Sentiment Could Be Fuel: Market pessimism may be overdone. Good earnings and incremental positive surprises—on trade or inflation—could trigger outsized upside reactions.
- Volatility Isn’t Gone: While there’s reason for optimism, Ryan and Sonu caution that volatility could remain for months. But the data doesn’t suggest an economic collapse is imminent.
- Sentiment Matters: Markets move on surprises. While early-year expectations were overly bullish, current excessive negativity might set the stage for more upside surprises.
