According to official reports, the U.S. economy added an impressive 303,000 jobs last month. That is much more than what was expected (just 202,000 new jobs) and much higher than the job creation total in February (around 275,000 new jobs). In fact, at 303,000 new jobs, the U.S. economy added more jobs last month than it has in any month since May 2023.
That’s reassuring. People have been talking about a recession for some time now. And in recent weeks, those recession calls have grown louder.
But today’s jobs data should ease those fears in a big way.
Deciphering the Jobs Data
This most recent batch of jobs data provided welcome signs of easing wage inflation.
Last month, average hourly earnings rose just 4.1% year-over-year. That is down markedly from the 4.3% wage gain reported in February. And in fact, it continues a multi-month trend of moderating wage inflation back to pre-pandemic levels.
In other words, we’re seeing healthy job growth with continued wage disinflation. That’s what we call a “Goldilocks” job market. It’s neither too hot to ignite reinflation nor too cold to spark a recession. It is “just right” – exactly what stocks need to rally.
And indeed, that’s exactly why stocks are rallying today.
With March’s jobs report illustrating bullish “Goldilocks” trends that should calm investor fears on both recession and inflation risks, this bad week has ended on a high note.
We think stocks are now ready for a big turnaround. And if you’re hoping to take advantage of this market strength, you should be buying stocks right now.
The Final Word
Technically speaking, since Halloween 2023, the S&P 500‘s major support line has been its 20-day moving average (MA). The market crossed above the 20-day shortly after that time, and it hasn’t looked back since. And for the past five months, every time the market has dipped to or slightly below the 20-day MA, it has rebounded strongly.
The same pattern is continuing right now.
This past week, we dropped to the 20-day moving average this week. Now we’re bouncing. And we think the bounce has legs. It seems this week’s volatility has created a great buying opportunity.
The million-dollar question is: Are you buying the right stocks on this rebound?
The market has bifurcated recently, split between the winners and losers.
On one side, AI and tech stocks are soaring to new high after new high. On the other, just about every other stock is struggling to rise at all.
This trend will continue. AI and tech stocks will continue to soar. Most other stocks will continue to struggle.
And, of course, that means you need to be focused on buying AI and tech stocks on this market rebound.
But which ones?
We may have the answer.
We’re confident that a new era of AI has emerged. Forget ChatGPT and other AI chatbots. Right now, the world’s biggest AI companies are quietly building – and heavily investing in – another form of AI; the next generation.
Uncover our top stocks to buy for this new era of AI 2.0.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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