Last Friday The Bureau of Labor Statistics posted a solid September jobs report. The economy added the most jobs in six months, pulling the unemployment rate down to 4.1%.
The economy added 254,000 jobs last month and 72,000 more jobs in July and August than previously reported. The strong data suggests that the Federal Reserve probably lowered rates by more than it needed to. It could have cut rates by 25 bps instead of 50 bps.
Bond yields jumped after the report. Investors who bet on the 20+ Year Treasury (TLT) sold their position. TLT stock closed at $95.55, well below the 101.64 high for the year.
Governments hired more staff in the month. Spending on defense reaffirms the strength of contractors like Lockheed Martin (LMT), RTX (RTX), and Northrop Grumman (NOC). Boeing (BA) rallied on the day but is the only aerospace firm that investors should avoid. Workers walked off the job, demanding higher wages. Costs are rising as pressure mounts for Boeing to increase its quality assurance efforts.
The healthcare sector added 45,000 jobs. Retailers added 15,600 staff, due mostly to hiring from supermarkets and drugstores. That suggests that Walmart (WMT), Kroger’s (KR), Costco (COST), CVS Health (CVS), and Walgreens (WBA) will report strong sales in the quarter ahead.