Skip to Content
Credit Insights

Investors Put the Economy Back Under the Microscope

Following a lackluster job report, we expect a significant amount of confusion in the markets over the next few days as investors reassess the strength and direction of economic growth.

Mentioned: , , , , , ,

The nonfarm payroll number, released last Friday, was a huge miss compared with expectations. Consensus expectations were for a gain of slightly more than 200,000 in March, but the Bureau of Labor Statistics reported a gain of only 120,000. This was significantly below even the most pessimistic forecast. A flight to the safety of U.S. Treasury bonds was evident during the abbreviated trading session Friday, as interest rates on 10-year Treasury bonds declined 13 basis points to 2.05% and are 17 basis points tighter compared with the prior week. The equity markets were closed Friday, but the S&P 500 futures reportedly dropped 1.1% to 1,375. Earlier in the week, the Morningstar Corporate Bond Index had widened out 2 basis points to +184 by the close of trading Thursday. However, we expect spreads will widen first thing Monday as investors look to reduce risk.

We expect a significant amount of confusion in the markets over the next few days as investors reassess the strength and direction of economic growth. Although the employment report was significantly lower than expectations, it may not necessarily portend a general economic slowdown, as favorable weather conditions earlier in the year may have pulled forward seasonal job growth. Average payroll growth between December and February was a healthy 246,000. Investors may also begin to second-guess many of the other economic indicators that have been released over the past few weeks. Generally, these metrics have indicated slow but steady progress, but they have often been softer than consensus estimates.

David Sekera does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.