Single stock futures showed a mixed picture on Monday night as the market sought to continue its momentum into a holiday-shortened week.
Weekly Gains for Hot Futures
- The Dow Jones Industrial Average dropped by 45 points, equivalent to 0.13%.
- S&P 500 futures experienced a slight decline of 2.75 points, or 0.06%.
- Nasdaq FTSE 100 futures gained 5.50 points, marking a 0.04% increase.
Labour Market Questions Arise After Jobs Report
This fluctuation in futures prices comes after a positive week for Wall Street, which saw the Dow and Nasdaq securing their most substantial gains since July. The Dow surged by 1.4%, while the Nasdaq recorded an impressive 3.3% increase for the week. The S&P 500 wasn’t far behind, enjoying a 2.5% gain, its most significant weekly advance since June.
Inflation and Labor Market Deceleration Await Fed’s Decision
Last week, investors grappled with new signs of an economic slowdown and decreasing inflationary pressures. The latest U.S. nonfarm payrolls report revealed an uptick in the unemployment rate, reaching 3.8% in August, the highest level in over a year. This increase was unexpected, as economists had predicted a rate of 3.5%. Furthermore, average hourly earnings rose by only 4.3% year-over-year, falling short of the 4.4% forecast by economists polled by Dow Jones.
Market’s Short-Term Outlook and September Uncertainties
Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, remarked that the labour market appears to be slowing, which could potentially allow the Federal Reserve to pause its policy rate hikes. Rieder noted that slack in the labour force seems to be growing, presenting investors with a short-term question about the interest rate futures.
UBS Maintains ‘Softish’ Landing View for the U.S. Economy
Despite August’s challenges for investors, UBS continues to predict a “softish” landing for the U.S. economy. Mark Haefele, Global Wealth Management Chief Investment Officer at UBS, stated that contradictory evidence and conflicting interpretations of economic data have caused turbulence in asset prices. Haefele pointed out the possibility of another rate hike due to last month’s core PCE increase exceeding the Fed’s target.
Fed and Interest Rates: Preparing for a Challenging Future
As September begins, investors are bracing themselves for the historical single stock futures’ weakness that this month tends to bring. Economic reports, including the personal consumption expenditures price index (a key inflation measure for the Federal Reserve), will be carefully examined. Traders are also watching the two-day Fed meeting in September, during which CB policymakers will announce their interest rate decision on September 20.