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Market Update September 7th

Market Update September 7th
September 8, 2015 wpengine

Five hundred point stock market drops, 300 point gains…it’s amazing the volatility and what we can get used to.

  • It seems that in the span of just over a week, investors and consumers have gotten used to the wild swings happening in the markets.

The craziness has been driven by 3 major factors. Two of which will continue to remain uncertain, and the third we will have an answer to on Thursday, September 17th.

Working from certain to uncertain, on September 17th the Fed will announce if they are raising interest rates as planned.

  • The concern of rising interest rates has investors spooked for the simple reason that no one was counting on all the economic uncertainty from China.
  • Since China is a huge consumer nation, and the fear that the slowdown may be worse than first thought, many investors are worried about how an interest rate increase at this time can further hurt company profits, especially for those operating in Asia.
  • The other two factors, China’s economic slowdown and slowing employment in the U.S. are issues that will not be resolved anytime soon.
  • China’s economic slowdown will impact many major corporations in the U.S. regardless of whether the Fed raises rates or not.

The labor sector in the United Stated seems to be slowing down.

  • ADP reported that they expect to see only 190,000 jobs added for the month of August. That is below most analysts’ expectations and has the markets a little on edge.
  • Although first time jobless claims continue to remain below 300,000, there is a growing sign that hiring is slowing as well.
  • In fact it appears that hiring is becoming less per month than the first time claims which means that we may be returning to an increasing unemployment number in the coming months.

Although manufacturing has slowed more than expected, which is creating concerns about the economy, the U.S. housing market appears to be gaining strength.

  • The market is currently the healthiest it has been since the great recession.
  • Home values appear to be stable if not rising.
  • Demand for housing is at a healthy pace as well.

Experts and analysts from all over, including Fannie Mae and Freddie Mac are giving indications that they believe the housing market is going to significantly improve in the fall of 2015 moving right into 2016.

  • This has many people tied to the real estate and lending markets excited.

By now we have learned that China, Greece, or almost any other major country in the world can have issues which could impact the U.S. markets. Stay tuned to see if next week is another market roller coaster.

The potential market moving reports due out next week are:

  • Monday September 7th – Labor Day: All Markets Closed
  • Wednesday September 9th – MBA Applications
  • Thursday September 10th – First Time Jobless Claims
  • Friday September 11th – Producer Price Index