Leon Cooperman shares market outlook following monthly jobs report

S&P 500 is in the green this morning even though the Bureau of Labour Statistics reported a better-than-expected growth in nonfarm payrolls for December.

Notable figures in the monthly jobs report

Nonfarm payrolls went up by 223,000 last month – a slight decline from 256,000 in November but meaningfully more than 200,000 that economists had forecast.

Continued strength of the labour market suggests the Fed still has more to do in its ongoing fight against inflation. According to Leon Cooperman – the billionaire chairman of Omega Advisors:

Labour seems to have the upper hand. There’s 1.7 jobs available for everyone looking for a job. That’ll be difficult for profit margins. So, going into a new bull market anytime soon makes no sense to me.

Versus its record high, the benchmark index is currently down roughly 20%.

Cooperman sees downside risk to low 3,000s

Also on Friday, unemployment rate was reported to have declined to 3.5% – 20 basis points below expectations.

Average hourly earnings in December gained 0.3% versus the prior month and 4.6% on a year-over-year basis. Economist had called for 0.4% and 5.0%, respectively. Speaking with CNBC’s Scott Wapner, Cooperman added:

I have low expectations from the market. In 2023, I’d say 50% chance that we stay in the range of 3,600 to 4,400. 5.0% change only of going above the 4,400 level. And a 45% chance that we could go into the low 3,000s.

A day earlier, a Piper Sandler analyst also said the S&P 500 could sink another 16% from here as the Fed pursues its signalled terminal rate of 5.1% as Invezz reported here.

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