Good Morning and Happy Jobs Friday!
Great news this morning on the Covid front and the Job front. Pfizer announced that they developed a Covid pill that reduced deaths by close to 90%. This is huge! What this means is that when this pill is accepted and distributed, millions of people will not lose their lives. It also means that a return to normal will be accelerated globally. Demand for travel will immediately see demand increase. On the jobs front, there were 531,000 new jobs added last month.. Average hourly earnings also went up by $.40. All of the good news, however, may create more pressure on the labor force and will in turn increase prices. Yep, more inflation. Will the Fed need to ramp up its bond buying and increase interest rates much sooner than expected? This could be the policy mistake that could slow the growth of the recovery. Market multiples may need to come down so all of this good news may mean that the economy may be running a bit too hot, but bond rates reacted by going down, which is surprising. We will need to see how the market digests all this but at this time, things look like on the up and up.
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