Home About Archives RSS Feed

@theMarket: Markets Still on a Roll

By Bill SchmickiBerkshires Columnist

Additional gains propelled stocks higher this week with all three averages closing at record highs once again. Despite the fact that more and more experts are warning of a possible fall in the averages, investors continue to pile into stocks. Should you?

The short answer is no, wait for that decline, unless you have no exposure to the stock market. That would be hard for me to believe if you have been reading my column regularly. My readers also know that the threat of a pullback hangs over the market all the time since we can expect as many as 2-3 declines in the stock market every year.

The economy, however, is still growing enough, and interest rates are still low enough, to justify the present level of stock prices.  Friday's nonfarm payroll data was just another example of the underlying support that is propelling stocks skyward.

The country's official unemployment rate has dropped to 4.3 percent. That is a historically low number and most economists would say we are at full employment now. That's not quite accurate, however, if you look at the "underemployment rate."

That is the number of workers who are presently working part time, but would prefer full-time work. If you add that category of workers with those who have a full-time job, you have an overall unemployment rate of 8.4 percent. That is quite a bit higher than the official rate but is still down from 8.6 percent in April and the lowest reading of the combined employment data since June 2007.

Anecdotal evidence from several CEOs around the country over the past few weeks seems to indicate that Corporate America is having an increasingly tough time filling job positions. And we are not just talking about skilled labor like engineers and IT specialists. Even service sector jobs like fast-food are crying for help.

Corporate America has had its own way when it pertained to hiring for the last decade or so. They could get all the labor they wanted, at the price they wanted. Workers, if they wanted to work, had to take whatever salary was offered, as well as a cut in benefits. Well, times are changing, and it is only a matter of time before business managers wake up to that fact.

I have been watching wage gains in the payroll reports for over two years now. The good news is wage growth has more than doubled from an anemic 1 percent 18 months ago to 2.5 percent today. Granted, the gains are up and down, depending on the time of the year, but the trend is your friend if you are a U.S. worker. And that just adds more support to the markets, since consumer spending is the lynchpin of what makes this country grow. Higher wages means higher spending, everything else being equal.

Enough about economics! The bottom line is that, regardless of what Trump, the Republicans, or the rest of the world is doing, right now the U.S. economy is in pretty good shape. As such, the markets have a cushion under them. That should keep any selloffs contained. So, sure, expect a 5-6 percent pullback any day, week, or month now, but don't let that get you down. It is the nature of investing. In the meantime, enjoy your gains.

Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Weekend Outlook: Mother's Day & More
Williamstown Voters Have Choices for Library Trustees Spots
Dalton Town Elections Monday, Planning Seat Vacant
Morningside Closed Friday for Flooding Cleanup
Fire District Seeks Legislative Fix for Mandatory Retirement Rule
Hoosac Valley High School Third Quarter Honor Roll
Pittsfield, Lake Onota Association Partner for Herbicide Treatment
Pittsfield Girls Softball Returns with County-Wide Competition
North Adams School, Finance Committee Endorse $22M School Budget
Veteran Adams Selectman John Duval Quits After Election
 
 


Categories:
@theMarket (577)
Independent Investor (452)
Retired Investor (292)
Archives:
May 2026 (2)
May 2025 (8)
April 2026 (9)
March 2026 (7)
February 2026 (8)
January 2026 (8)
December 2025 (8)
November 2025 (8)
October 2025 (10)
September 2025 (6)
August 2025 (8)
July 2025 (9)
June 2025 (8)
Tags:
Congress Greece Debt Ceiling Recession Selloff Commodities Retirement Housing Interest Rates Fiscal Cliff Europe Federal Reserve Jobs Wall Street Metals Rally Oil Currency Stock Market Banks Taxes Japan Pullback Energy Mortgages Election Economy Deficit Markets Stimulus Stocks Debt Bailout Euro Crisis
Popular Entries:
The Retired Investor: The Hawks Return
The Retired Investor: Has Labor Found Its Mojo?
The Retired Investor: Climate Change Is Costing Billions
The Retired Investor: Time to Hire an Investment Adviser?
The Retired Investor: Crypto Crashes (Again)
The Retired Investor: My Dog's Medical Bills Are Higher Than Mine
The Retired Investor: Food, Famine, and Global Unrest
The Retired Investor: Holiday Spending Expected to Stay Strong
The Retired Investor: U.S. Shale Producers Can't Rescue Us
The Retired Investor: Investors Should Take a Deep Breath
Recent Entries:
The Retired Investor: Despite the Rise of Streaming, Movies Still Matter
@theMarket: Oil Surged, and So Did the Markets
The Retired Investor: Tariff Refunds Leave Consumers Out — Again
@theMarket: Markets Consolidate Near Highs
The Retired Investor: Inflation and Wartime Economies
@theMarket: Stocks Rocket Higher in Historic Bull Run
The Retired Investor: America's Wartime Economy
@theMarket: World Markets Await Yet Another Weekend of Ceasefire Talks
The Retired Investor: Fish Prices Are Jumping
@theMarket: Stocks Held Hostage by Threats From Both Sides