Economy
The US economy lost 23,000 jobs last month, a number that comes in lower than the expected gain of 80,000 - 100,000. The previous two months were also revised lower, bringing the rolling 3-month average to just 30,000 jobs created per month. Some of the weakness in jobs numbers was attributed to temporary World Cup-related employment ending. The private sector showed a net gain of 30,000 jobs but was more than offset by a loss of 53,000 government jobs, mostly in local government education. Many people thought that a rate hike in September was a foregone conclusion, but a soft jobs report could open the door for the Fed to continue to leave rates unchanged while they take a wait-and-see approach with inflation data.
Markets
The S&P 500 closed on a literal high note Friday after a great week for stocks that saw the index climb 3.58%. Stocks were seemingly unphased by the weaker-than-expected jobs numbers. There were a number of contributing factors to this week's rally. For one, as stated above, there's now a higher chance that the Fed won't look to raise interest rates in the near term. In addition, oil prices fell this week as talks of reopening the currently blockaded Strait of Hormuz progressed. Perhaps the largest driver is the fact that earnings continue to roll in hot. At this point, most of the companies in the S&P 500 have reported their results from last quarter, and the results have smashed expectations. FactSet reports that companies' results have, in aggregate, been more than 29% above the expected numbers, marking the highest upside earnings surprise since they began tracking this data in 2008.
What We're Reading
- Spending Money- Ben Carlson
- The AI Capex Boom is Building Twice as Fast as the Housing Boom- Torsten Slok
Have a great weekend.
Dogwood Wealth Management