Facts vs Feelings with Ryan Detrick & Sonu Varghese
Why Stocks Just Bottomed (Ep. 59)
Nov 8, 2023
In this podcast, Ryan Detrick & Sonu Varghese discuss the recent market rally and potential year-end rally, the actions of the Federal Reserve and their impact on the economy, the disconnect between the labor market and inflation, the growth in the labor force and low number of layoffs, and the anticipation for the future in the markets.
40:43
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Quick takeaways
- Productivity growth has seen a significant increase, leading to implications for the economy, inflation, wages, and the bull market.
- The rise in the unemployment rate is still within a manageable range and has not triggered the Psalm Rule for a recession.
Deep dives
Productivity on the rise amid improving labor market
Productivity has seen a significant increase over the past two quarters, with a 4% rise in Q2 and Q3. This marks the largest two-quarter increase since the late 1990s. The surge in productivity is a result of businesses making investments, including labor, that are now bearing fruit. As the labor market normalizes, firms are incentivized to enhance productivity and organize work more efficiently. Higher wage growth also plays a role in driving productivity improvements, as it prompts firms to invest in technology and become more efficient. Productivity growth has implications for the economy, inflation, wages, and the continued bull market.
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