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WEEKLY SUMMARY : US payrolls put a Sept. Fed rate hike back on the table
Major U.S. stock indexes finished the week narrowly mixed as investors weighed renewed U.S.-Iran hostilities, rising oil prices, a better-than-expected jobs report, and shifting Federal Reserve monetary policy expectations. The Dow Jones Industrial Average lost 0.27%, while the Nasdaq Composite added 0.40%. The S&P 500 and the Russell 2000 indexes were little changed. Growth stocks outperformed their value counterparts by the widest margin in a month. Within the S&P 500, the energy sector posted the strongest gains as oil prices rose amid renewed Middle East tensions. Treasury yields moved higher alongside oil prices, with the 10-year reaching roughly 4.82% intraday on Wednesday before retracing somewhat on Thursday after Fed Governor Christopher Waller said he would be inclined to keep rates unchanged if incoming data confirm that disinflation is continuing. However, yields across most maturities resumed their upward climb after Friday’s better-than-expected jobs report appeared to increase expectations for a near-term Fed rate hike. Indeed, U.S. employers added 162,000 jobs in August, well above estimates for around 55,000. June and July revised higher. Outside the US, the STOXX Europe 600 Index ended the week down 0.81% while Japan’s Nikkei 225 Index declined 2.09% as JGB yields reached their highest level since 1996. Dollar dumped on another Yen intervention (the Yen gained 2.5% over the week). Gold and bitcoin whipsawed.
Have a great weekend.
Charles & Syz Research Lab
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