Welcome to Thoughts on the Market. I'm Mike Wilson, Chief Investment Officer and Chief

U.S. Equity Strategist for Morgan Stanley. Along with my colleagues bringing you a

variety of perspectives, I'll be talking about the latest trends in the financial

marketplace. It's Monday, December 9th at 9 a.m. Eastern, let's get after it.

What started out as a scary week for markets finished on a high note.

Kicking things off to the downside was a weaker than expected purchasing manager's survey for manufacturing,

and President Trump's comment that it may be better to wait until after the election next year before signing a trade deal with China.

With markets having rallied so much over the past few months on hope for a bottom in manufacturing

and expecting a trade deal before the December 15th deadline,

it's not surprising markets sold off sharply.

In fact, we had the worst back-to-back trading days in equity since early October.

Markets modestly recovered on Wednesday with news the talks were still progressing.

Then on Friday we got the jobs report for November that showed businesses are still hiring at

a much higher rate than what the consensus expected. Markets rallied sharply.

To be honest, no one was more surprised by the strong jobs number than yours truly.

With profit margins deteriorating due to higher labor costs,

I've been expecting weakness in hiring as companies finally decide they

need to reduce head count or at least not expand it.

But that's clearly not the case yet.

If there was anything to pick on about the jobs data, it said it was flattered by the end of the GM strike, something that will not be repeated next month.

Additionally, the ADP report came out on Thursday and that was actually weaker than expected, so the reality is that we're probably

somewhere in between these two labor market signals. In short there are no signs of

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