Stocks closed sharply lower on Friday and for the week.

That marks the third down week in a row for the S&P and Nasdaq, but only the first recent down week for the Dow, small-cap Russell 2000 and mid-cap S&P 400.

All but the Dow are now in either pullback territory or correction territory.

From their recent high close just a few weeks ago, the Dow is down by -3.55%, the S&P 500 is down -5.66%, the Nasdaq is down -10.04%, the Russell is down -6.82%, and the S&P 400 is down -5.36%.

For reference, a 'pullback' is defined as a decline between -5% and -9.99%. A 'correction' is a decline between -10% and -19.99%.

As painful as pullbacks and corrections are, they are very common. Every bull market has them. In fact, stocks usually pull back roughly 3-4 times per year. And corrections take place on average of about once a year.

I point this out because if you know these are commonplace moves, you can instead look at them as opportunities to buy rather than places to sell.

Friday's Employment Situation Report, which came in weaker than expected, is being cited as the catalyst for the selloff on Friday, even though the Fed has suggested that's precisely what they are looking for to begin cutting rates.

Nonfarm payrolls came in at 114,000 (97,000 in the private sector and 17,000 in the public) vs. the consensus for 180,000 (155,000 private and 25,000 public). The unemployment rate increased to 4.3% vs. last month's 4.1% and views for the same. The participation rate rose to 62.7% from last month's 62.6% print and consensus. And average hourly earnings eased with a 0.2% m/m gain vs. last month's 0.3% and estimates for 0.3%, while the y/y rate came in at 3.6% vs. last month's downwardly revised 3.8% (from 3.9%).

Additionally, May's jobs tally was revised down by -2,000 to 216K from 218K, and June's was revised lower by -27,000 to 179K from 206K.

The biggest job gains came from the following industries: Healthcare added 55,000 jobs, Construction jobs were up 25,000, Transportation and Warehousing increased by 14,000, and Social Assistance employment was up
9,000.

The biggest decline in employment came from the Information industry which shed -20,000 jobs.

The weaker jobs numbers have sparked concerns over a possible recession. But I think that is wildly premature.

In spite of the softer labor readings, jobs are still on the rise, the 4.3% unemployment rate is historically low, Q2's GDP came in above expectations at 2.8%, Q3's GDP is forecast at 2.5%, and corporate earnings and sales are trending higher with Q3 earnings growth estimated at 5.5% and sales at 4.8%; Q4 earnings at 11.7% and sales at 5.4%; and Q1'25 earnings at 13.2% and sales at 5.5%.

None of this even remotely spells recession.

What we currently appear to be going thru is a typical pullback and correction.

And savvy investors should be on the lookout for places to buy before the next leg up.

This week will be a busy week of earnings with 1,755 companies set to report, including Amgen, Uber, Airbnb, Novo Nordisk and Eli Lilly to name a handful.

We'll also have a busy week of economic reports.

And we'll see if the markets can stabilize after their recent declines. Either way, I believe we are closer to the end of these declines than the beginning. And I'm looking at it as an opportunity in a bull market.

See you tomorrow,