Mike Larson | Editor-in-Chief
The US economy just shed 23,000 jobs. Yet the news sent stocks up sharply on Friday. How can that be? Because as I can’t stress enough, the stock market is NOT the economy.
Consider my MoneyShow Chart of the Day here. It shows the percentage change in nonfarm payrolls from July 2025 through July 2026 and the total return of the S&P 500 Index (^SPX) during that same period. Talk about a divergence! Payrolls grew just 0.37% while the S&P returned 18.1%.
Sources: Bureau of Labor Statistics, S&P Dow Jones Indices
In raw terms, the year-over-year job change came to 591,000. That’s okay, but not terrific.
We had five months during that stretch where the economy shed jobs, too. Plus, that 0.37% growth rate is a notable slowdown from the post-pandemic recovery gains of 1.5% to 2%.
And YET...the S&P surged more than 1,150 points during those 12 months. What about the longer term? The S&P returned 26.2% in 2023...25% in 2024...and 17.8% in 2025. It was recently up 13.3% for 2026 on a total return basis. Those numbers all handily top the long-term average.
Zooming in on the short-term, how can stocks rally on news the economy shed workers? Because it lowers the chance of a Federal Reserve interest rate hike. Reducing the fear of tighter money makes investors willing to pay more for stocks. Bonds and precious metals, too.
All this underscores why you have to check your emotions at the door as an investor or trader. Bad news on Main Street isn’t necessarily bad news on Wall Street. Sometimes it’s "good" news. If you want to stay on the right side of the markets, you can’t forget that!
In this MoneyShow MoneyMasters Podcast segment recorded at our Las Vegas event, Anas Alhajji explains why renewed geopolitical tensions haven’t sent oil prices well into the triple digits again. He points to earlier market damage, increased OPEC production, and supply making it to global markets away from the Strait of Hormuz.
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This blockbuster event will feature four days of education, networking, and entertainment, all centered around the theme “The Human-AI Edge.” From experts like Jim Bianco, Matt Hougan, and Larry McDonald to sessions like “Prediction Markets, Crypto, and AI Trading” and “What’s the Current Outlook for Tech Stocks?” the Symposium has exactly what your portfolio needs at precisely the right time!
Tap the button below to make sure you don’t miss out — and I’ll see you at the Fairmont San Francisco soon…
The Nasdaq Composite Index’s impressive run of four consecutive daily gains of more than 1% came to an end on Aug. 5. While the streak is over, its significance remains. Since the Nasdaq’s inception in 1971, this is only the 18th occurrence of four straight 1%-plus daily advances, notes Jeff Hirsch, editor-in-chief of The Stock Trader’s Almanac.
Advanced Micro Devices Inc. (AMD) and Sandisk Corp. (SNDK) delivered earnings beats this week, yet both stocks fell. While the market trend remains intact, risk management is key for now, suggests Lance Roberts, editor of the Bull Bear Report.
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