The Economic Week Ahead, January 3-6

The first week of 2023 will be action packed, especially with so many labor market indicators coming out. If they are too strong, investors will fear higher-for-longer interest rate hikes by the Fed. If they are too weak, investors will fear an impending recession. The first scenario is bad for stocks and bonds. The second scenario is bad for stocks but good for bonds. If the upcoming batch of labor market indicators show some slackening of demand for workers, stocks and bonds would probably both react well to this third scenario.