Wage pressure inflation is moving markets today. Brian also discusses weakened stocks on account of trade negotiations with China and numbers from the ADP & BLS job reports.

 

Happy Friday. Brian Manning here with Weekly Update. Let’s get right to it.

Let’s see, hopefully everyone had a great holiday weekend for Labor Day. I did a little backpacking trip in the Indian Chase Wilderness Area, absolutely beautiful. Took an extended vacation, so not only was I out Monday, I was out Tuesday, as well. So I don’t have anything to report on Tuesday, other than my trip was amazing.

Wednesday this week, stocks were really weaker based on potential sliding negotiations on a trade agreement between China and the US, and also Canada and the US. So that had a little bit of impact on stocks on Wednesday.

Thursday this week, I can’t believe it’s already jobs week. The first week of every month we get jobs data. This tells us what’s happened with job growth, unemployment, and wages over the prior month. We’re now looking at the month of August. So, Thursday this week we got the ADP report. ADP is the largest provider of private payrolls in the US. ADP had 163,000 new jobs created in the month of August. But ADP is not really the big market mover. It’s the one that came out today, which is the BLS Report. BLS stands for the Bureau of Labor Statistics. This is the government’s report on job creations.

So, today we got a report. We had 201,000 new jobs created for the month of August. This is about 10,000 more than was expected. That wasn’t really the big market mover. We also had unemployment remain steady at 3.9%. That wasn’t a big market mover. What’s the big market mover was really the inflation. We’ve been talking about inflation for a while now. So, wages, what we pay employees on a weekly basis, has increased from 3% to 3.2%, so now you’re really starting to see what’s called wage pressure inflation, and the markets don’t like this. Inflation really is the enemy of bonds, and as we see more and more inflation happen to us in the US economy, mortgage rates are going to rise. So as you look at what’s happening in the markets today, wage pressure inflation here with weekly wages going up 3% to 3.2%, 10-Year Treasury is not acting nicely, mortgage rates are increasing today. As we talked about, inflation’s the enemy of bonds, and we got to keep an eye on this.

I’m around on weekend, if you have any questions, let me know. If you have any clients that way to get pre-approved, give me a call. I’d love to help you any way I can. Happy Friday. Have a great day.