The employment report for February came in far stronger than expected and with the upward revisions January 'shocked' many. We weren't surprised, we've discussed the underlying strength of the US economy for many months, and the job numbers were in line with other economic indicators we've discussed.
But, that doesn't really matter because those numbers are all 'BC' - Before Coronavirus. It doesn't matter currently to investment markets because there has been a growing expectation that going forward we are going to see potentially large economic dislocation associated with the potential pandemic.
To clarify, the underlying strength of the US economy is still quite impressive; job growth, wage growth, home buying, home building, increasing manufacturing and construction jobs (among the highest hourly wage earners), relatively low inventories...etc.
So, who's right? Both, actually. The economic reports/numbers we get are always in the 'rearview mirror' and the stock and bond markets are pricing in future expectations. But, the economic reports are 'actual' numbers and the stock and bond markets expectations are simply that - expectations, which may be right or wrong.
Focusing on the 'post Corona' environment one can see the potential for a rapid increase in economic activity. Taxes are low, employment is high, wages are increasing, the regulatory burden has been cut, we have a trade deal with China, and people are likely delaying purchases which create pent up demand. That does not mean one should blindly disregard the stock market selloff, but that the economic dislocation is very likely temporary.