The US stock market has recorded losses for three weeks in a row, reports say. The “Goldilocks” jobs report didn’t change the perspective that the Federal Reserve would proceed with a dramatic interest rate increase by the end of September.
The Dow will register a drop of 2.7%, S&P is on track to fall for 3% and the Nasdaq will slide 4%, according to the latest data.
On Friday afternoon, US stocks recorded losing trends, after at first they found support with the 315,000 new job openings in the American economy last month.
Anthony Saglimbene, who is a chief market strategist at Ameriprise Financial, points out that the US Federal Reserve cools down the economy by using increased interest rates in order to fight against inflation.
For the future size of the additional rate increase by the central banks, he said that from a market perspective, it kept the debate of a 50 or 75 basis points move by the Fed at the end of the month on the table. Saglimbene added that the market odds were suggesting they move 75 basis points, but considering the actual labor report, he believed that the inflation data for September was going to be the key data.
Although the number of new job openings in the US met the expectations in August, the economists were surprised by the unemployment rate which rose to 3.7% from 3.5% in July. The uptick in the rate on the labor market drove the increase from 62.1% to 62.4%.
The US Commerce Department informed Friday that the orders for manufactured goods dropped 1% in July. This was the first drop after nine months.
Larry Cordisco, co-lead portfolio manager of the Osterweis Growth and Income Fund, stated that it was sort of right where the expectations had been. He stressed that it was neither showing a big slowdown or too hot for an acceleration, so combined with the overall positioning in the market, it was a positive for stocks. Still, Cordisco wants to keep an eye on the situation.
