All of the major indexes soared on Friday, with the Dow and the S&P both closing higher for the week.

A fantastic jobs report ignited the rally.

Friday's Employment Situation report came in way better than expected at 379,000 new jobs for February vs. expectations for 175,000. (That came out to 465K new private sector jobs vs. estimates for 183K, and -86K public sector jobs vs. estimates for -8K.) The unemployment rate ticked down to 6.2% vs. last month's 6.3% and the consensus for the same.

Leisure and Hospitality led the way with a gain of 355,000 new jobs. (About 80% of that came from 'Food Services and Drinking Places,' which is government speak for restaurants and bars.) Health Care and Social Assistance jobs increased by 46,000. Retail Trade added 41,000 jobs. And Manufacturing added 21,000 jobs.

The biggest declines in jobs came from Local Government Education which fell by -37,000 and State Government Education. And Construction jobs (largely non-residential, and heavy and civil engineering jobs). (The report also noted that the winter weather likely contributed to the decline in those construction jobs as well.)

We also saw revisions to December and January's numbers: while December was revised down by an additional -79K jobs (for a larger loss of -306K), January was revised up by 117K jobs (for a bigger gain of 166K).

Earlier in the week, the market was pressured by inflation concerns. But I believe it was overblown and misguided. We all know there's likely to be higher inflation sometime in the future. But fears that the Fed would soon raise rates seemed misplaced given that Fed Chair Jerome Powell, just the week before, said there were no plans to raise rates in the foreseeable future. And while he acknowledged that he expects inflation to pick up in the coming months, he also expects the increase will be temporary.

In fact, he's on the record expressing more concern over the lack of inflation than inflation rising.

But if we do see an uptick in inflation, that should be viewed as a positive. Lindsey Bell, Chief Investment Strategist at Ally Invest, noted that "yields tend to rise early on in bull markets and in economic recoveries because the outlook is improving."

And the outlook sure does look like it's improving.

But eventually (maybe in a couple/few years?) when inflation is hot enough for the Fed to take action on rates, it will likely take years more to raise rates enough to slow down the economy and stop this bull market. (I mean, rates are essentially at zero right now.)

In the meantime, the economy looks like it's in store for more record growth with the Atlanta Fed estimating Q1 GDP to come in at 10.0%, and others forecasting full-year GDP to grow at the fastest pace in 38 years.
This is history in the making.

And historic times typically usher in historic prices moves.

So make sure you're taking full advantage of it.

See you tomorrow,