It’s a four-day trading week, thanks to yesterday’s observance of Labor Day, and even though our calendar tells us market activity can be expected to pick up after the final full month of the summer, this week promises to be even quieter than last week: we saw monthly jobs totals from ADP and the Bureau of Labor Statistics (BLS) on Wednesday and Friday, respectively, as well as the Fed’s preferred inflation metric, Personal Consumption Expenditures (PCE), and many more.
This week will bring us ISM Services, a new Beige Book, U.S. Trade Deficit, Wholesale Inventory, Consumer Credit and Q2 U.S. Productivity and Unit Labor Costs, as well as July Factory Orders out this morning after the opening bell. Also, Fed Presidents from around the country will be making public appearances, perhaps giving us a preview of what to expect at the next Fed meeting, which begins two weeks from tomorrow — and will include its first summary of economic projections since June. Philadelphia’s Harker, Chicago’s Goolsbee, New York’s Williams, Atlanta’s Bostic, Dallas’ Logan and San Francisco’s Daly will all be providing insights.
Last week’s Employment Situation report was fairly Goldilocks, if we consider an overheated jobs market might inflame higher inflation: 187K was higher than the previous two months — which saw drastic revisions to the downside — but the third-straight sub-200K print, which is consistent with a cooling labor market. In fact, 187K is a modest but positive monthly jobs total historically. (We generally need between 50K-100K new jobs created per month to replace Baby Boomers retiring.) So there you have it: Goldilocks — not too hot, not too cold.
The last week of trading was a good one, if off the intra-day highs of Thursday and Friday, depending on the index. The Nasdaq led the way again, keeping pace with its stellar 2023 so far: +2.5%. The Russell 2000, which slid a bit off highs late last week, still closed +2%. The S&P 500 and Dow grew +1.64% and +0.85%, respectively.
At this hour ahead of the opening bell, we’re marginally in the red except for the Dow, which is marginally in the green. That said, markets appear to be on a glide path at present, and even though September does have a dicey history of stock market performance, we don’t see a ton of things providing major headwinds — bond rates and the writers/actors strike in Hollywood notwithstanding.
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