Jobs Data Means Little to Stock Market That Only Cares About Coronavirus

Need more evidence the financial markets are coming asunder? The U.S. economy added nearly 100,000 more jobs than expected in February, and stocks paid it no mind.

The robust data landed in an equity market gripped by fear that the spreading coronavirus will push the global economy into a recession. Stocks mired in a correction barely paused to acknowledge it before continuing on their trajectory lower.

Traders had better get used to it. Any data collected before the American psyche became preoccupied with the coronavirus will be dismissed out of hand. Far more important than 273,000 jobs added in February is news about the virus’ spread, and reminders of the authorities’ limited response.

“Overall, a strong report. Given it was pre-virus, the market has effectively completely ignored the impressive showing,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets. “The market will be sensitive to incoming Covid-19 headlines and we anticipate a reluctance to go home short Treasuries for the weekend.”

Larry Kudlow, director of the National Economic Council, indicated that the private sector will solve the virus problem. On Bloomberg TV, he said “timely and targeted micro measures” rather than spending hundreds of billions of dollars would be the appropriate fiscal response.

The upcoming economic calendar is riddled with a mix of data that was largely collected before the virus broke out in the U.S., including February inflation, retail sales, building permits, and existing home sales.

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