Markets had 4 days to move higher this week as speculation swirled on the direction of the economy. Will this month see through the data with hopes of growth through quarter’s end?
Monday
S&P 500 0.00% | NASDAQ 0.00%
Happy Labor Day!
Tuesday
S&P 500 0.69% | NASDAQ 0.82%
Markets started the month of September with shifts out of equities and stirred up selling in bond markets as well. The 2- and 10-year treasury yields rose, indicating a shift in mindset on the direction of interest rates. Markets were pricing in a 93% chance of a .25% interest rate cut in September.
Wednesday
S&P 500 0.51% | NASDAQ 1.02%
Job openings have fallen to their lowest level in almost a year. Optimism grew for equity markets, however, on forward looking guidance of a rate cut. The NASDAQ jumped with big tech scoring wins following rulings on anti-trust battles in favor of search engines.
Thursday
S&P 500 0.83% | NASDAQ 0.98%
ADP (payroll giant) Job change data came in lower than expected ahead of the official government release on Friday. The services sector improved, offsetting the jobs data release and buoyed markets into the close. Treasury yields fell on the day in anticipation of lower jobs figures than last month.
Friday
S&P 500 0.32% | NASDAQ 0.03%
Markets opened higher on expectations that a rate cut has been essentially priced in for September. The unemployment rate edged higher, and jobs added in August came in at one-third of forecasts. The optimism faded later in the day as worries of a slowdown crept in.
Conclusion
S&P 500 0.33% | NASDAQ 1.14%
Stock and bond markets teeter-tottered this week with eventual gains to close out the holiday-shortened trading-week. The NASDAQ Composite was elevated as Google scored a big win in their anti-trust suit. Markets have leaned into a rate cut in the next couple of weeks. Rate cuts start at .25%, which is currently priced into trading. However, in September 2024, the Federal Reserve opted for a .50% rate cut to begin their rate cutting cycle. The Federal Reserve is likely to take a more measured approach this time and go with a smaller cut. This could, however, leave the door open for two additional cuts in October and December.
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