The stock market does not always reflect economic conditions | Real Time Headlines

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.

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 89,000. 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. Asia-Pacific stocks continue to slide on Monday. Japanese Nikkei 225 Index A decrease of about 0.7%, data showed that the country’s second-quarter GDP grew at an annual rate of 2.9%, lower than the 3.2% surveyed by Reuters.

Prices stagnate in China
Prices in China rose only 0.6% August compared to the same period last year. A Reuters poll predicted growth of 0.7% this year. At the same time, China’s factory price index for industrial products decreased by 1.8% year-on-year, a decline that exceeded expectations. To deal with deflationary pressure, China needs to “proactive fiscal policy Yi Gang, former governor of the People’s Bank of China, said:

The Risks of Closing an Arbitrage Trade
Kathy Lien, managing director of FX strategy at BK Asset Management, told CNBC that the yen remains strong against the dollar and could move higher as U.S. yields fall. This could lead to yen carry trades – where investors borrow yen to invest in higher-yielding assets – further relaxation.

(PRO) JP Morgan downgrades Chinese stocks
China’s economy and stock market have struggled recently in the face of deflationary pressures, a property market collapse that has yet to recover, and sluggish consumer demand. Well, it’s not surprising JPMorgan Chase downgrades China stocks – but Banks still like specific Chinese stocks.

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 71%, and the probability of a 50-point interest rate cut is only 29%. 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.