Friends
That was an ugly reversal. After a goldilocks type jobs report stocks opened nicely higher and were sporting nice gains (300 plus Dow points) by late morning. But with the 3-day weekend looming, traders decided that they did not want to hold onto stocks and selling accelerated into the close. As for that much anticipated jobs report, we saw 318,000 new jobs created in August. That was about as expected but not too good. The unemployment rate rose to 3.7% which was a bit higher than estimated. Average hourly wages were up but not as hot as expected, and labor force participation rate was up more than expected – that’s a good thing. So, all in all, the jobs report was just about right, not too hot, and not too cold.
As for today, by the close the Dow Jones Industrial Average was down 337 points to finish the day at 31,318. The S&P 500 was down 42 points to close at 3,924. The Nasdaq Composite Index was down 154 points to close at 11,630. Gold was up $11 to trade at $1,720 per ounce, while oil was up $.31 to trade at $ 86.92 per barrel WTI.
So, actually it was a good day for the Fed. The jobs data was goldilocks like, and the stock market went down. If you’re Jerome Powell that is just what the doctor ordered. The Fed would love to see softer economic and inflation causing data and a stock market that does not go up (remember they want to squash the wealth effect). Well, we knew this was going to take while.
Have a great Labor Day Weekend everyone.
