It was a wild day for stocks, finishing off a wild week. We knew we were going to have a Fed rate cut this week, but the announcement of new Chinese tariffs was some added spice to the stew. Today, we got a decent jobs report with 164,000 new jobs created in July and an unemployment rate of 3.7%. Once again more people came off the sidelines to look for jobs, boosting the participation rate, and average hourly earnings were up .3% or slightly better than 3% year over year. So, the jobs report was fine, but stocks still smarting from yesterday’s tariff announcement tumbled deeply into negative territory once again in early morning trading. But, in the afternoon part of the trading session buyers appeared and by the close some of the damage was repaired.
For the day, the Dow Jones Industrial Average was down 98 points to close at 26,485. The S&P 500 was down 21 points to finish the day at 2,932. Gold was up $20 to trade at $1,452 per ounce, while oil was up $1.36 to trade at $55.31 per barrel WTI. The 10 year Treasury note continued to rally with the yield falling to 1.85%.
I know it’s human nature to think that this time is really it, stocks are about to break. Well, just remember the Fed Chair Powell has been quick to appease this year, and any form of weakness would likely produce more accommodation from the Fed. So, if you are selling right now, you are fighting the Fed. You may win this battle, but the Fed has a very good long term win/loss record. Let’s see if this week’s damage spills into next week.
Have a great weekend everyone.