US stocks are trying to rise. The Dow is up nearly 600 points and the NASDAQ over 200 points today, but has given up much of its gains as the Dow is nearly flat and the NASDAQ is down -35 points. The gain came today despite a stronger jobs report that showed 261,000 new jobs this month, up 52,000 from last month. That’s over 300,000 a month. The unemployment rate is still at 3.7 percent. This is above 3.5%, but not by much (historically low level). At certain times strong employment is indeed a good thing and should be good for stocks, but in the current environment where inflation is economic and public enemy No. 1, a tighter workforce is not good. Infrastructure construction continues to drive mega-construction, especially in the sawdust sector. In addition, automakers must build their EVs in the U.S. to receive rebates for buyers. Cars built outside the US do not receive this discount. Do automakers want to lose sales because they don’t build in the US and their cars cost the consumer more? I don’t think so. Mass production is a new technological sector. At a time when workers are scarce, this is not good for labor costs and, in turn, inflation. Inflation moves forward, and the more entrenched it becomes, the harder it is to control. However, this inflation is not like the technology market. Technicians can cost money, but they can also be very productive. Building a car is building a car. Yes, higher prices affect the economy. However, the Fed has no choice, because persistently higher inflation will eventually lead to higher unemployment anyway. So kill inflation if jobs are good. Slow down growth, balance things out and remove the market’s perception that past years’ profits are not what the future holds. Right now I think there are those in the market who still think the Fed will stop and it will be rainbows and unicorns again. That stocks go up and up. In reality, the bubble caused by Covid is bursting. Covid started it and fixed things. Economies shut down, supply chains messed up. People stopped going to work but worked from home. People felt comfortable in their homes. In response, governments and central banks have created this la-la environment of free money for all men, women and children. We’ve seen SPACES become a thing and lead to speculation. We saw NFT become a thing where people paid exorbitant amounts of money for digital images of monkeys.