What we’re reading (4/1)
“Stock Rally That Nobody Saw Coming Is Refusing To Go Quietly” (Bloomberg). “A final-hour surge Friday salvaged a third straight up week for the S&P 500 -- barely -- extending a run for U.S. equities that at times has ranked among the strongest in the past decade. The benchmark gauge has retraced well over half its tumble since the start of the year, a shock to institutional traders who spent most of the last three months slashing risk.”
“US Stocks Rally As The Solid March Jobs Report Points To The Fed Staying Aggressive With Rate Hikes” (Insider). “The S&P 500 bobbed in and out of positive territory late in the session before closing with a moderate gain. The Labor Department said the US economy added 431,000 jobs in March, below the forecast of 490,000, but February figures were upwardly revised to 750,000. The world's largest economy has now recovered 93% of the jobs it lost at the start of the coronavirus pandemic.”
“What Is A Yield Curve And Why Are Investors Worried?” (Morningstar). “[N]ot all yield curve-inversions lead to recessions, says Dominic Pappalardo, senior client portfolio manager at Morningstar Investment Management. (Economists sometimes joke that the yield curve has predicted 10 of the last five recessions.)”
“Wage Gains Show Signs of Slowing” (Wall Street Journal). “Wages continued to grow in March, but the pace has cooled slightly over the past few months, suggesting employers are feeling less pressure to offer pay increases as more people return to the workforce, which could ease inflation pressures.”
“Formative Experiences Matter Over Long Periods Of Time” (Christopher Severen and Arthur A. van Benthem, AEA via Marginal Revolution). “Formative experiences shape behavior for decades. We document a striking feature about those who came of driving age during the oil crises of the 1970s—they drive less in the year 2000. The effect is not specific to these cohorts; price variation over time and across states indicates that gasoline price changes between ages 15–18 generally shift later-life travel behavior. Effects are not explained by recessions, income, or costly skill acquisition and are inconsistent with recency bias, mental plasticity, and standard habit-formation models.”
