Stocks, Metals Plunge as Dollar Gains on Debt, Jobs Concerns - Bloomberg.com.
It's startling to me to see the media continue to use the word "unexpected" related to any bad economic news, particularly jobs. As we've said before, Corporate America faces substantial uncertainties regarding potential cost increases related to greater regulation and taxation. Given the inability to gain clarity regarding these issues, Corporate America continues to focus on cost containment. The largest component of the cost structure is labor. Hence, Corporate America is intensely focused on managing labor costs. That can translate into layoffs or to hiring freezes. Neither is good for consumers and neither should be "unexpected". Until the government clarifies its intent with regard to taxes and regulation, Corporate America will be hesitant to spend.
We've anticipated a market correction of 15-20% at some point during 2010. We assumed it would be driven by investors resetting expectations to reflect lower GDP growth and the resulting negative impact on corporate earnings growth. It appears it may be happening a little earlier than expected, but it is not "unexpected".
It's startling to me to see the media continue to use the word "unexpected" related to any bad economic news, particularly jobs. As we've said before, Corporate America faces substantial uncertainties regarding potential cost increases related to greater regulation and taxation. Given the inability to gain clarity regarding these issues, Corporate America continues to focus on cost containment. The largest component of the cost structure is labor. Hence, Corporate America is intensely focused on managing labor costs. That can translate into layoffs or to hiring freezes. Neither is good for consumers and neither should be "unexpected". Until the government clarifies its intent with regard to taxes and regulation, Corporate America will be hesitant to spend.
We've anticipated a market correction of 15-20% at some point during 2010. We assumed it would be driven by investors resetting expectations to reflect lower GDP growth and the resulting negative impact on corporate earnings growth. It appears it may be happening a little earlier than expected, but it is not "unexpected".
