The big news for this week was a surge in payrolls for July which exceeded the highest of economists’ forecasts. Headline unemployment held steady at 4.9% and the labor participation rate inched higher to 62.8% of the population. The healthy employment report tells us that people are working and there is little sign of recession. Our economy continues to chug along at a very modest clip and in many ways, this is good because it keeps the Fed from raising rates immediately, while at the same time does not necessitate giant injections of stimulus.
That said, the odds of a Fed rate hike have now increased to 18% at their next meeting which ends on September 21st. Here is a look at the latest CME Fed Watch Tool.
Major US stock market indices look to end the week with slight gains. Here is the latest report from Morningstar through Thursday night’s close.
Here we see a full 10 year chart of the S&P 500. We have finally broken out from the choppy sideways pattern that has dominated the market over the last couple of years.
The market however is always susceptible to short term pullbacks. August and September have been a historically weak seasonal period. Election years are also filled with unpredictability until election results are announced. A reminder that pullbacks are a normal part of market dynamics and for long term investors, time in the market is preferred over timing the market.
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Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.
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