The Week on Wall Street
A Friday rally overcame a shaky week, sending stocks mostly higher.
The Dow Jones Industrial Average slipped 0.30% for the week. Meanwhile, the Standard & Poor’s 500 gained 0.48%, and the Nasdaq Composite index added 1.60% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, fell 2.37%.1,2,3
Friday Rally
Stocks rallied on Friday after a stronger employment report than Wall Street expected. The headline increase in September payrolls initially generated fears of further Fed rate hikes, leading to a spike in bond yields and steep early morning losses. A yield retreat may have triggered the turnaround as investors focused more on the month’s moderate wage growth.
Stocks were shaky for much of last week on rising bond yields. When Treasury yields hit their highest level since 2007 on Tuesday, stock prices dropped, leaving the Dow Industrials in negative territory for the year. The catalyst for the day’s spike in interest rates was a surprisingly strong JOLTS (Job Openings and Labor Turnover Survey) showing nearly one million more open jobs than investors had expected.4
All About Jobs
The labor market remains resilient. August JOLTS showed job openings exceeded 9.6 million, above the consensus estimate of 8.8 million. A weak Automated Data Processing (ADP) private payroll job growth (released Wednesday) that showed 89,000 new private sector jobs appeared to be an outlier compared to the other reports.5,6
Friday’s monthly employment report showed a robust gain of 336,000 new jobs, nearly double the consensus forecast of 170,000. At the same time, the previous two months saw significant upward revisions of 119,000 (combined) from initial reports. Wage gains rose modestly, coming in below expectations and striking a hopeful note on inflation.7
Weekly Riddle
It is round and has a big mouth but never speaks. It is most often in a cabinet. What is it?
Last week’s riddle: What goes in the blank below: Bob is Ken’s son. Therefore, Ken is the ______of Bob’s father.
Answer: Name.
John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
www.grandcanyonplanning.com
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