FX168 Financial News (Europe) — On Tuesday (June 25), Morgan Stanley Chief Information Officer Mike Wilson (Mike Wilson) told Bloomberg TV that the job market can determine the success or failure of the stock market, and any sudden weakness could trigger meaningful adjustments.
Wilson said that if the number of new laborers starts to decline, the prospect of a soft landing will disappear and may cause the Federal Reserve to cut interest rates. Given that the current rise in the stock market comes from hopes for a “Golden-girl” style of economic growth, this is enough to cause the stock market to fall by 10%. #2024投资策略 #
“Let's say economic growth is evolving into a real growth panic or what are the key triggers for potential recession fears?” Wilson said. “This is the labor market.”
He said that if the number of non-farm payrolls falls below 100,000, or the unemployment rate rises above 4.3%, the economic slowdown will be obvious.
What is certain is that at least one of the figures is still far from Wilson's threshold: in May, the number of new jobs exceeded expectations, reaching 272,000.
But from a broader perspective, cracks began to appear, and the unemployment rate finally surpassed 4% in the same month, while potential recruitment trends showed mixed signals.
Wilson said in a recent report that this is important for stock investors because the market is already paying more attention to growth trajectories rather than inflation and interest rate trends.
As a result, he told Bloomberg that the current high market is reasonable because investors are buying high-quality growth stocks.
“The question is, are the price-earnings ratios on these stocks too high right now? “I think if you achieve a perfect soft landing and everything goes well, that's fine,” he said. “If anything goes wrong, then there's a problem.”
He said there are three main abnormal risks, of which a slowdown in growth is most likely. Two other threats are a rebound in inflation or a spike in US Treasury yields. If investors are nervous about federal debt, yields will rise.
Wilson pointed out that labor growth risks are not currently occurring, but they may become dangerous in the third or fourth quarter. Once it happens, he said, it will drag down not only leading tech stocks, but other stocks as well.