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- 🔨 New job report coming
Good morning investors! September is proving to be a difficult month as stocks continue to struggle and Bitcoin remains under $60,000.
Today we cover:
Friday’s job report.
Stocks fall again.
Changing oil situation
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📊 Economy and News
All eyes on today’s job report
Wall Street is bracing for one of the most significant economic releases of the year, as the Labor Department is set to publish the latest jobs report today.
This data is expected to play a crucial role in shaping the future direction of Federal Reserve policy. Analysts are forecasting nonfarm payroll growth of 161,000 for August, along with a slight drop in the unemployment rate to 4.2%, according to Dow Jones.
Signs of a Hiring Slowdown
Recent data has pointed to a sharp deceleration in hiring, raising concerns that the official jobs report might fall short of expectations.
A significant downward revision to previous job numbers suggests that the labor market is cooling, which could have broader economic implications. July’s report showed payroll growth of just 114,000, signaling a slowdown that has left markets speculating about the Fed's next moves.
Federal Reserve's Next Steps
Given the slowing job market, many market participants are confident that the Federal Reserve will lower interest rates in the coming weeks. There is even speculation of a substantial cut depending on the strength of Friday’s job report.
Traders are currently pricing in a series of rate cuts that could reduce the federal funds rate by about 2.25 percentage points through 2025.
Growing Concerns in the Labor Market
Workers are becoming increasingly pessimistic about job prospects. The Zeta Economic Index, which leverages AI to track economic trends, reveals that job market concerns are mounting.
In August, job market sentiment fell 1% and is down 4.6% compared to last year. Meanwhile, the wage component of the upcoming jobs report is expected to show modest growth, with average hourly earnings anticipated to rise by 0.3% month-over-month and 3.7% year-over-year.
Global hits:
Social media platform Bluesky attracts millions in Brazil after judge bans Musk’s X, which is already in trouble as advertisers plan to withdraw in record numbers.
Red Lobster cleared to exit Chapter 11 bankruptcy protection.
Broadcom says it will sell $12 billion in AI parts and custom chips this year.
Rate cut: A more significant interest rate cut by the Federal Reserve this month could unsettle financial markets and convey a misleading signal about an impending recession risk, an economist has warned. This comes as many expect U.S. central bank policymakers to begin reducing interest rates during their meeting on Sept. 17-18.
George Lagarias, the chief economist at Forvis Mazars, mentioned in an interview with CNBC on Thursday that, although the size of the Fed's upcoming rate cut remains uncertain, he strongly advocates for a quarter-point reduction.
Something about oil: Members of the OPEC+ oil alliance have delayed plans to hike production by a scheduled 180,000 barrels per day in October, according to two OPEC+ sources, who could only speak anonymously due to the sensitivity of talks. The increases were part of a plan to gradually return a broader 2.2 million barrels per day to the market over the following months.The 2.2 million-barrel-per-day decline had been a short-term voluntary cut implemented by just eight members of the OPEC+ alliance.
Surprising: Volvo Cars cuts margin and revenue aims after ditching 2030 electric vehicle target.
📈 Stocks
S&P 500 5,503.41 (-0.30%)
DJIA 40,755.75 (-0.54%)
NASDAQ 18,930.33 (+0.047%)
BRENT CRUDE 72.69 (-0.02%)
* Prices as of Sep 6th, 12:20 AM UTC
S&P 500 posts third straight loss
Stocks faced pressure yesterday as investors shifted away from riskier assets amid growing concerns about the U.S. economy ahead of Friday’s critical labor report. Market sentiment was clouded by uncertainty over the Federal Reserve's future rate decisions.
Mixed Signals from Labor Market Data
Thursday’s labor market updates painted a conflicting picture of the economy. Private payroll data revealed the weakest job growth since 2021, fueling fears of a slowdown in hiring. On the other hand, weekly unemployment claims fell slightly, adding to the uncertainty about the true state of the labor market and whether the Fed is moving too slowly in cutting interest rates.
Heightened Market Sensitivity to Economic Data
In recent weeks, the market has reacted sharply to signs of economic weakness, with Tuesday’s sell-off following disappointing manufacturing data being a prime example. As a result, investors are paying close attention to Friday’s nonfarm payroll report for August. A weak July report last month triggered recession concerns and increased market volatility throughout August.
Notable Stock Movements
Tesla surged 4.9% after announcing plans to roll out its full self-driving software in Europe and China by early next year. In contrast, Frontier Communications plunged 9.5% after Verizon revealed its intent to acquire the company in a $20 billion deal, valuing it below Frontier’s closing price on Wednesday. Verizon shares edged down by 0.4%.
Oil production: OPEC+ extends oil output cuts again through November .
Worth checking out: The graying population is going to have a long-term effect on equity performance, according to an analysis by JPMorgan.
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💵 Personal Finance
Geopolitical tension can be an opportunity for investors
As seen in the image above, geopolitical tensions can cause stocks to crash, which can be a good opportunity to invest. Some investors may seize such opportunities and some may prefer to wait for more stability.
Your individual circumstances and investment goals should ultimately drive your decision on whether to invest in stocks during times of war or conflict in other countries.
Consider seeking professional advice and conducting thorough research to make informed choices that align with your financial objectives and risk tolerance.
💰 Be a Better Investor
“Investing is not about beating others at their game. It’s about controlling yourself at your own game.”
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.