LAST WEEK’S MOMENTUM-FILLED GAINS WERE ABRUPTLY REVERSED ON FRIDAY AFTER THE JOBS REPORT SHOWED THAT THE US ECONOMY IS RUNNING QUITE HOT WHILE THERE IS STILL NO EASY OFFRAMP FROM THE CONFLICT IN IRAN.

LAST WEEK’S MOMENTUM-FILLED GAINS WERE ABRUPTLY REVERSED ON FRIDAY AFTER THE JOBS REPORT SHOWED THAT THE US ECONOMY IS RUNNING QUITE HOT WHILE THERE IS STILL NO EASY OFFRAMP FROM THE CONFLICT IN IRAN. ADD THEM UP AND WE GET PERSISTENT INFLATION, NO HOPES OF RATE CUTS, AND A FED MODEL LEFT TAIL THAT IS CAUSING VALUATION PRESSURE ON EQUITIES. FORTUNATELY, EARNINGS ARE BOOMING (THE RIGHT TAIL), WHICH SHOULD HELP OFFSET ANY P/E DERATING (AS IT DID BACK IN MARCH WHEN THE P/E-MULTIPLE FELL TWICE AS MU

Jobs report shows hot US economy, persistent inflation, no rate cuts, and Iran conflict.