From CNBC:

The U.S. stock market is facing challenges as strong job numbers and wage growth suggest that the Federal Reserve’s interest rate hikes have not had the desired effects, Smead Capital Management’s CEO stated.

Nonfarm payrolls grew by 353,000 in January, greatly outperforming expectations, with unemployment remaining steady at 3.7%, leading to projections that the Fed is likely not to cut rates in March.

Some analysts argue that the upside from recent data signifies that the need for monetary easing is less urgent, indicating that the market and the economy are coping well with the high rate environment.

Inflation has slowed significantly, but the U.S. consumer price index increased by 0.3% month-on-month in December, bringing the annual rate to 3.4%, above the Fed’s target of 2%.

The three major Wall Street averages on Friday closed out a 13th winning week out of the last 14 despite warning on rate cuts, as bumper earnings from U.S. tech titans powered further optimism.

Strength in the jobs market, consumer sentiment, and household balance sheets could mean the Fed has to keep interest rates higher for longer, potentially not benefitting the stock market from the strength in the economy.



Read more: Stock market in a ‘very dangerous’ position as jobs and wages run hot, fund manager says