Tags: Browning | stocks | employment | S&P 500

WSJ's Browning: Stocks Face Significant Obstacles

By    |   Monday, 05 May 2014 02:59 PM

The stock market has dipped slightly since Friday's strong jobs report, echoing its struggle so far in 2014, a period that has seen the S&P 500 offer a total return of only 2.4 percent.

The April employment report itself was a mixed bag. While non-farm payrolls rose 288,000 and unemployment fell to 6.3 percent, wages rose only 1.9 percent over the last year, and the labor participation rate matched a 36-year low.

The S&P 500 has declined 0.1 percent since the jobs news.

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Investors have several worries keeping them cautious on stocks, writes Wall Street Journal columnist E.S. Browning.

First, after last year's 32.4 percent total return for the S&P 500, many question whether the market is overvalued. In addition, there is concern about whether economic and earnings growth are strong enough to boost stocks.

For equities to rise in earnest, job gains alone won't be sufficient, Scott Clemons, chief investment strategist at Brown Brothers Harriman, tells Browning.

"It will take some catalyst, a genuine acceleration in economic activity or a sign that corporate America can expand profit margins from already record-high levels," he said. "I am hard-pressed to see a whole lot of catalysts."

Uncertainty appears to reign over stocks now. "The market is having a bit of an identity crisis right now, searching for a direction," Joseph Tanious, a global market strategist at JPMorgan Asset Management, tells Bloomberg.

"We are seeing opposing forces in the market. We continue to remain choppy, going back and forth."

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The stock market has dipped slightly since Friday's strong jobs report, echoing its struggle so far in 2014, a period that has seen the S&P 500 offer a total return of only 2.4 percent.
Browning, stocks, employment, S&P 500
269
2014-59-05
Monday, 05 May 2014 02:59 PM
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