“Time in the market beats timing the market.”
-Ken Fisher
Here’s what you need to know this week:
- Stocks move lower on a weak jobs report
- Markets bounce back after another encouraging inflation report
Slowing Jobs Growth
Markets had their worst week since March 2023 due to a worse-than-expected jobs report. The nonfarm payrolls report showed the US economy adding 142,000 jobs in the month of August, worse than the 165,000 that economists expected[1]. The jobs numbers for June and July were also revised lower. The one optimistic part of the report was that the US unemployment rate fell from 4.3% to 4.2%.
The Job Opening and Labor Turnover Survey (JOLTS) also came in lighter than expected, showing 7.67 million job openings for the month of July. This marked the lowest number of total job openings since January 2021[2]. These two reports have put more pressure on the Federal Reserve to cut interest rates; Fed Governor Christopher Waller said in a speech on Friday that “the current batch of data no longer requires patience, it requires action”.[3]
Traders have taken notice. The bond market is currently pricing in a 15% chance that the Fed will actually cut interest rates by 0.50% instead of 0.25% to restore investor confidence[4]. Prominent analysts are also calling for a 0.50% cut: Don Rissmiller from Strategas says “For insurance against downward revisions, the Fed should cut by 50 basis points (0.50%) in September, they look behind the curve currently”.[5]
Softening Inflation
Markets have rebounded this week and received good news this morning from the Consumer Price Index (CPI) report. The CPI report for August showed monthly inflation right in line with expectations at 0.2% and annualized inflation at 2.5%, a 0.4% decline from July and the lowest print since February 2021[6].
This report all but guarantees an interest rate cut at the Fed’s meeting next Wednesday, September 18th. As for the magnitude of the cut, we’ll have to wait and see.
What Else
- Both presidential campaigns say they want a second debate after last night’s debate on ABC
- Israel fired multiple strikes at southern Lebanon and reportedly hit multiple Hezbollah targets
- Boeing reached an agreement with its worker’s union, avoiding a potential strike
- OU plays Tulane this Saturday at 2:30 PM on ESPN
- OSU plays Tulsa this Saturday at 11:00 AM on ESPN2
What We’re Reading
A joint European and Japanese mission sent an unmanned spacecraft to Mercury in an attempt to orbit the small planet. The spacecraft, named BepiColombo, just reached Mercury and transmitted some of the clearest photos of the planet to date. Click below to see the photos and to read more about the mission:
What’s Happening Downtown
Ten Buck Lunch week runs through this Friday in Midtown. Click below to see a list of participating restaurants and the deals they offer:
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] Yahoo! Finance; [3] Bloomberg; [4] CME FedWatch; [5] Bloomberg; [6] CNBC