Not being a big “Quote” guy, but being a constant learner and podcast fanatic … Pulled this from my weekend notes on a Health related Podcast with Dr. Stuart McGill –
“All systems need stress to improve! Of course do not cross the tipping point!”
I am going to apply this to Capital Markets and more importantly Capital Market PARTICIPANTS! Stress is good for Capital Markets so as to keep risk in check….when left without stress for too long…. human nature is to take it/easy street investing for granted! Wrong!!
Ok, back to our regular scheduled program:
The First business Friday of each month marches in a BLS report on Employment both hiring and national rates… last Friday (Aug 2, 2024) was the release of July’s numbers…. well the first print as many revisions have occurred lately, but let’s go through the numbers..
The Actual number missed estimates by a pretty large amount 114k v estimate of 175k
Then the second part of the report… the actual unemployment rate.. which ticked up somewhat unexpectedly … FAR RIGHT OF CHART 4.3% Annualized rate to be exact…..
Mission accomplished or at least, started...as this is just what FOMC (Federal Open Market Committee) members led by Jerome Powell have been wanting in the form of a slower economy…
While not an overzealously negative report, it was negative, but again FINALLY what the Dr. ordered from an Economic/FOMC standpoint!
The Smartest guys in the room AKA the Bond guys were startled and began pricing in major interest rate cuts UDATED AS OF THIS AM… Again Far Right!
Friends across the pond, most notably Japan really took the news hard and can basically only react today with the time changes …. there of course are A LOT more going on when you factor currencies and interest rates… they have a couple more hours until their afternoon session closes and trading stops, but their reaction on this Monday is fanning the flames!
Have a Great “Risk/Stress Economic Explained” Day!
John A. Kvale CFA, CFP
AI Content Authenticity: All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
