Why 'bad news is good news' for stocks

STORY: U.S. private payrolls increased far less than expected in May, suggesting demand for labor was starting to slow amid higher interest rates and tightening financial conditions, the ADP National Employment report showed on Thursday.

"Right now, bad news is good news," said Augenthaler. "Any sign that the economy is slowing down... is a sign that what the Fed's doing is succeeding."

All eyes are now on the government's nonfarm payrolls data on Friday, with investors looking for fresh signs of the U.S. economy's health and how aggressively the Fed may continue to raise interest rates. Analysts are expecting the economy to have added 325,000 jobs last month.

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