Stocks advanced on Friday, with a lackluster August payrolls report signaling reduced odds for a September rate hike, but still adequate to preserve investor optimism for a growing economy. The Labor Department said employers added 151,000 new jobs last month, well below economists’ projections for 180,000. In revisions, the net two-month change subtracted 1,000 jobs, while August details showed that factory payrolls declined by 14,000. Unemployment held steady at 4.9%. While the report wasn’t strong enough to overly dampen the run up in Financials last week, it was enough to end a two-week slide on the S&P 500.
For the week, the S&P 500 rose +0.56%, the Dow Industrials gained +0.52%, and the MSCI EAFE (developed international) increased +0.48%.
What We’re Reading
Bill Gross: One & Done in September -- Fox Business
Global Central Bank Outlook -- Bloomberg
Putin Hints at Oil Production Freeze -- Business Insider
Chart of the Week: No Post-Brexit Crisis…Yet
The latest surveys suggest that the U.K. economy has slowed but not slumped following the EU referendum, while growth in the world as a whole has remained sluggish, according to Global Economics. The U.S. economy looks set to pick up a bit after a very weak first half of the year while activity may slow in the euro-zone and Japan. In emerging market economies, aggregate growth has rebounded because the recessions in Brazil and Russia have eased and estimates suggest that growth in China has stabilized. With inflation still close to zero in advanced economies, Global Economics expects more monetary policy easing by year-end in the euro-zone and Japan, but the Fed is likely to raise interest rates again in December.
As the black line in the chart above reveals, Britain’s composite manufacturing and services’ PMI activity strongly rebounded in August after a post-Brexit slump, and note the U.K.’s comparative standing relative to the latest global PMI composite readings. The Eurozone’s composite PMI held broadly steady in July and August, suggesting that Brexit has had little impact there. Back across the Atlantic, the U.S. ISM manufacturing index slumped in August, to below 50, while America’s service industries expanded at the slowest pace in six-years.
Some materials are chosen by the Cetera Investment Management team and summarized by Jason Vitucci who is not affiliated or registered with Cetera. Cetera Investment Management provides investment management and advisory services to a number of programs sponsored by First Allied Securities and First Allied Advisory Services. Cetera Investment Management individuals who provide investment management services are not associated persons with any broker-dealer. International investing involves additional risk, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. Investing in companies involved in one specified sector may be more risky and volatile than an investment with greater diversification.