Economy
We saw a better-than-expected jobs report on Friday as it was announced the economy added 254,000 jobs (the expectation was around 150,000). In addition, the unemployment rate ticked down to 4.1% from 4.2%. While this good news on the labor market isn't likely to cause the Fed to alter it's plans to continue lowering interest rates, it may have very well slammed the door shut on a cut of 0.5% in November. A strong labor market and cooling inflation is a recipe for a 0.25% cut as long as things continue to stay that way. We're more likely to see larger cuts of 0.5% (or more) if either of those two economic variables were to reverse course. Larger rate cuts may also be used as a sort of shot of adrenaline if we were to experience any external shocks to the system (geopolitical risks, for instance).
Markets
The markets were relatively tame this week as we didn't get a whole lot of news to chew on until Friday's jobs report. The S&P 500 rose by 0.2% for the week ending October 4. We saw one new all-time high for the index on Monday, and we sit just a hair below that mark as of now. As we kick of earnings season this coming week, the stock market has already seen gains of 20% year-to-date. We'll have the first major activity for the quarter Friday morning (October 11) when we hear from a few major financial companies (JP Morgan, Wells Fargo, BlackRock). Expectations are still optimistic for corporate earnings through 2025, but if companies on balance are falling fort of those marks, we may experience higher levels of volatility. For now, there's no flashing warning signs in our face, however, and you have to continue to give this bull market the benefit of the doubt.
What We're Reading
- Six Reasons Q3 Was Extraordinary for Markets - Carson Group
- The Mortgage Refinance Wave is Here - Bloomberg
Have a great weekend.
Dogwood Wealth Management