The job market is still hot despite the 500bps increase in the federal funds rate since March of last year. Today's batch of strong labor market reports turned investors cold on stocks and bonds. Good news for workers is bad news for financial markets if it means that the Fed will continue to raise interest rates. In addition, it gives hard-landers another spin: The economy may be strong now, but that will boost inflation, forcing the Fed to cause a recession to bring inflation down. We are still disinflationary soft-landers and stock market bulls, targeting 4600 on the S&P 500 by the end of this year.
