“In investing, what is comfortable is rarely profitable.”
-Robert Arnott
Here’s what you need to know this week:
- Markets finish August in positive territory, marking four straight months of gains
- Markets kick off September on a sour note
- Two jobs reports come later this week
Winning Streak
The three major stock indices (S&P 500, Dow Jones, NASDAQ) all gained ground in the month of August, extending a winning streak that began in May. The S&P 500 gained 3.7% while the Dow Jones and NASDAQ both gained 3% even[1]. The Russell 2000 (the index for US small cap stocks) also posted a solid 1.44% gain. This run places all four indices above 10% gains for the year.
Sluggish September
Stocks returned from Labor Day in a sluggish mood to start the month of September, with all three major indices posting declines of more than 1.5%. The reason for this selloff is not immediately apparent. Last Friday we received July’s Personal Consumption Expenditures (PCE) report which showed annualized inflation at 2.5%[2], exactly in line with analyst’s expectations. This all but ensures that the Federal Reserve will lower interest rates at their next meeting on September 18th, which should be good news for stocks.
Occasionally the stock market has selloffs like these with no apparent catalyst. Perhaps large funds were taking gains off the table after this four month winning streak. September is historically the worst month for stocks, and is the only calendar month to average a negative return over the last 98 years[3]. Maybe investors were selling to get ahead of an anticipated September selloff, creating a self-fulfilling prophecy. Or maybe there was no reason at all; over the long term stocks usually go up, but sometimes we just have days like this.
Jobs Week
Looking ahead, there are two catalysts this week that may stabilize the markets. The first is the Job Opening and Labor Turnover Survey (JOLTS). Analysts expect this month’s JOLTS report to show job openings fall to 8.1 million, which would indicate a cooling but still strong labor market[4]. The second is the Non-Farm Payrolls(NFP) report this Friday, which is also expected to show a slowing yet still strong jobs market. Either way, markets are likely to remain choppy until we get closer to the Federal Reserve’s interest rate meeting in two weeks.
What Else
- The first presidential debate between former President Trump and Vice President Harris takes place next Tuesday, September 10th on ABC
- At least 63 wildfires continue to plague the Pacific Northwest
- OU plays Houston at 6:45 PM this Saturday on the SEC Network
- OSU plays Arkansas at 11:00 AM this Saturday on ABC
What We’re Reading
One mile beneath the earth at South Dakota’s Black Hills, scientists study the most elusive particles in the known universe: neutrinos. Click below to see photos of this incredible research facility and read what the scientists hope to learn from their experiments:
What’s Happening Downtown
The Night Market at Scissortail Park returns this Friday, September 6th. This event takes place once a month during the fall and features dozens of local vendors, live music and food trucks. The Night Market is free to attend and runs from 5:30-10:00 PM. Click below to learn more:
Written by: Kane Ogle, CFP®
Steve Beck, Amber Eduvigen, CFP®, Kane Ogle, CFP®, Cale Olbert, CFP®, Brett Valentine, Brandon Ingerson, Jenni Hess, Anne Boone
Sources: [1] Bloomberg; [2] CNBC; [3] Investopedia; [4] Yahoo! Finance