9/7/18 – Stocks Pull Back in Holiday Week

Stocks declined during the first week of September despite a strong August jobs report released this morning. The Dow declined 0.2% while the S&P 500 was down 1.0%.

The August jobs report showed the economy added 201k net new jobs last month while the unemployment rate remained at 3.9%. Wages increased at a 2.9% annual rate, the fastest rate since 2009. We’re also seeing more people leave part-time (not by choice) jobs and move into full-time jobs. In many respects, this a very similar report to what we’ve seen over the last 95 months of positive job growth. Steady gains in employment and relatively moderate wage growth. Strength in the labor market continues. Nothing in this report changes my view that the Fed will increase rates against by 0.25% later this month at their meeting. Read More

Electric car company Tesla saw its stock down as much as 9% today following a strange, late night interview with founder and CEO Elon Musk. Musk has been under intense scrutiny recently and has hinted at burnout and potentially needing a break. In spite of this, or maybe as a release, he spent almost three hours on a late night interview with Joe Rogan that involved drinking whiskey and smoking what Rogan told him was a marijuana/tobacco combination. This morning, two senior executives announced they were leaving the company. While neither specifically mentioned Musk’s mental state or the interview, the timing suggests some senior people at Tesla are losing faith in Musk. Tesla stock is down more than 30% over the last month. Read More

Oil decreased this week, declining 3.1% to close at $67.73/barrel. The yield on the 10-yr Treasury moved higher, closing at 2.94% from 2.86% last week. The average rate on a 30-yr fixed rate mortgage moved higher to 4.54%, from 4.52% last week.

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