Unemployment could hit 6% on labor demand concerns: Strategist
The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) are extending their gains Tuesday morning as stocks rebound from early August woes and investors digest this month's strong economic data. However, with ongoing uncertainty in the market, Insigneo Chief Investment Officer Ahmed Riesgo joins Morning Brief to share his outlook. Riesgo identifies the primary concern for the market is continued weakness in the labor market, stating "we think that that's going to ultimately be what drives this market lower." He points out that the consumer remains resilient due to job stability, but warns that if unemployment rates continue to rise, "we think the US consumer, unfortunately, will falter." He also highlights a key issue within the labor market: labor demand. According to Riesgo, a combination of lower labor demand and increased labor supply is contributing to a higher unemployment rate, predicting that it could reach as much as 6% in the event of a mild recession. Regarding investment strategies in this environment, Riesgo recommends a focus on consumer savings, utilities, healthcare, and consumer staples. For more expert insight and the latest market action, click here to watch this full episode of Morning Brief. This post was written by Angel Smith
