Welcome back from the long weekend. Get this — the S&P 500 has notched 38 all-time high closes this year. |
However, today is the first day of trading for what’s historically been the worst month of the year for stocks. |
This week, though, all eyes are on the labor market. |
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Labor Day kicks off labor week |
| Made with AI by Opening Bell Daily |
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It’s fitting that Labor Day kicked off a week that includes three critical labor market reports on Wednesday, Thursday, and Friday, respectively: |
Job Openings and Labor Turnover Survey (JOLTS) ADP’s monthly private employment August non-farm payrolls |
The August jobs data holds particular gravity. |
Remember it was the same report a month ago that led to a sharp stock sell-off and led some economists to call on the Fed to make an emergency interest-rate cut. |
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The panic subsided and stocks eventually finished August higher. |
That said, the government did announce near the end of the month that it had overstated job growth by 818,000 in the 12 months up to March. |
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The updated numbers will either cement or dissolve concerns that the labor market is deteriorating more than expected. |
Those forecasts, in turn, will materialize in the central bank’s next move. |
To be sure, Jerome Powell has already signaled that a rate cut is coming this month. What remains uncertain is the pace of those cuts. |
Weaker-than-expected jobs data could open the door to a jumbo, 50-basis-point move lower, whereas as-expected reports could lead to the typical quarter-point cut. |
Economists surveyed by Bloomberg expect that the US added 163,000 jobs in August, and the annual unemployment rate dipped from 4.3% to 4.2%. |
The unemployment rate has not decreased in six months. |
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Meanwhile, anecdotal evidence suggests everyday Americans are not so confident in their employment outlook. |
A new Bankrate survey found that almost three in four respondents were concerned about job security. |
Plus, nearly half of workers planned to look for a new role over the next year. |
Morgan Stanley, for its part, sees the labor market as moderating but not in a “slump.” The firm expects the Fed to cut rates by 25 basis points. |
“We see a solid [non-farm payrolls] print,” analysts wrote in a note Friday, “confirming our view that the economy is slowing but heading to a recession, and we don’t forecast a sharp increase in the unemployment rate on the horizon.” |
Feedback or thoughts? Hit reply to this email or let me know on X @philrosenn. |
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Elsewhere: |
📈 The S&P 500 keeps winning. Friday marked the index’s fourth consecutive winning month in a row. The Dow and Nasdaq Composite also finished August in the green. At the same time, S&P 500 companies recorded their fourth consecutive quarter of earnings growth, shrugging off much of the summer worries. (MarketWatch) |
💼 Look out for jobs data this week. On Friday, the government will release the August jobs report, which could determine whether the Federal Reserve initiates a jumbo-sized rate cut or not. Before that release, we’ll also see updates on job openings, wage growth, and manufacturing data. (Bloomberg) |
💡Nvidia earnings didn’t cut it. Stellar earnings be damned, investors looked let down last week. The company just saw its fifth quarter in a row of triple-digit annual sales growth, and it secured more than $30 billion in revenue for the first time ever. And yet, Wall Street has grown so accustom to ridiculous Nvidia earnings that these numbers didn’t push the stock higher. (Yahoo Finance) |
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Rapid-fire: |
The Fed’s preferred inflation gauge for July showed prices cooling as expected (Yahoo Finance) Parenthood has become increasingly expensive and child-care costs have outpaced inflation for the last 2 decades (Barron’s) Nvidia’s earnings inspired in-person watch parties and fanfare among dedicated retail investors (WSJ) China’s economy is in such a jam that weak demand for commodities like coal and soybean have led to huge stockpiles (Bloomberg) A Fed rate cut won’t help ease credit card debt, according to Bankrate (Fox Business) Tesla sales in China climbed 3% in August compared to a year earlier (Reuters) Volkswagen is considering unprecedented factory closures in Germany to help cut costs ahead of a union fight (Bloomberg) |
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Last thing: |
| Global Markets Investor @GlobalMktObserv | |
| 🚨ANOTHER US RECESSION SIGNAL🚨 The difference between the share of consumer confidence survey respondents saying jobs are plentiful and hard to get declined to 16.4%, the most since the COVID CRISIS. It implies that the US unemployment rate could jump to at least 5.5% soon. | |
| | 6:30 PM • Aug 28, 2024 | | |
| 321 Likes 118 Retweets | 4 Replies |
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