On September 4, 2024, a trader worked on the trading floor of the New York Stock Exchange (NYSE) in New York City, the United States.
Brendan McDermid | Reuters
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
hybrid work report
american economy 142,000 new non-agricultural jobs were added in August. That was below Dow Jones’ forecast of 161,000 but better than July’s revised estimate of 86,000. The labor force increased by 120,000 people in August, and the unemployment rate fell to 4.2% from 4.3%.
Stock market plummets
U.S. stocks fell on Friday,and Nasdaq Index This week’s closing price fell 2.55%, which is more than 10% higher than the historical closing price. All major stock indexes ended the week lower. this The pan-European Stoxx 600 index fell 1.07%. The benchmark index ended the week down 2.5%, its biggest weekly loss in a month.
sinking oil
It’s not just the stock market that’s had a bad week. The price is U.S. crude oil plunges 8% Last week, it was the worst week since June 2023. West Texas Intermediate OilThe October contract hit $67.16 a barrel. Next year won’t be better: Bank of America cuts oil price forecast Increased from $75 to $71.
Stiglitz and Yellen
Ahead of jobs report, Nobel laureates Economist Joseph Stiglitz said The Federal Reserve raised interest rates “too much, too fast” and a 50 basis point interest rate cut will help inflation and employment. At the same time, the U.S. Treasury Secretary Janet Yellen assures public On Saturday, she saw and hoped to continue to see a “good, solid economy.”
(PRO) Bull Lameness
this S&P 500 Index The U.S. economy entered a bull market nearly two years ago on the belief that a soft landing was the ultimate goal for the U.S. economy, CNBC Pro’s Michael Santoli writes. But as the job market weakens rapidly and stock market bellwethers lose momentum, questions remain: Coming interest rate cuts will impact markets.
bottom line
What does the market know that we don’t?
Friday, S&P 500 Index Down 1.73% Dow Jones Industrial Average down 1.01%, Nasdaq Index It fell 2.55%, ending the week’s losses for all major U.S. stock indexes.
Large-cap tech stocks were among the worst performers. The names behind much of this year’s rally— NVIDIA, letter, Amazon — down about 4% on Friday alone.
If market movements are a barometer of the health of the economy, we’re facing some bad times ahead.
However, this is a very big “if”. The market is not so much an Excel formula as Word’s often random autocomplete suggestions.
What we do know from the hard data is that while the U.S. economy isn’t doing very well, it’s not great either. Almost as bad as the stock suggests.
The number of new jobs created in August was significantly higher than in July, and the unemployment rate fell. Yes, the headline number was lower than expected. But it broke a downward trend since May and suggested the U.S. job market was not headed in the wrong direction.
Of course, jobs reports focus on the past, while markets predict the future. However, according to the forecast of the futures market itself, the probability of a 25-point interest rate cut in September is 65%, and the probability of a 50-point interest rate cut is only 35%. CME FedWatch Tool.
This means that economic conditions are not bad enough that the Federal Reserve will be forced to cut interest rates significantly. Beyond that, there haven’t been any specific news or earnings reports impacting Big Tech’s fundamentals.
farther, Goldman Sachs and the Federal Reserve Bank of Atlanta most recently. revised their forecasts GDP growth in the third quarter.
Emily Rowland, co-chief investment strategist at John Hancock Investment Management, said the downbeat week for stocks appeared to be “an emotion-driven move, driven in large part by growth concerns.”
Sometimes emotions tell us things that our gut knows but our brain doesn’t. Other times, we need to teach ourselves that reason and sensibility are often at odds with emotion.
– CNBC’s Jeff Cox, Sam Meredith, Samantha Subin and Pia Singh contributed to this article.
