The Standard & Poor’s 500 Index ended Friday lower, at its lowest closing level since July, after mounting a bid for consecutive gains earlier in the session. The first two days of September, which has historically been the worst month of the year for stocks, were mixed after the rough month of August, which has usually been a strong month for the market. Following Friday’s Goldilocks August government employment report, market expectations for a 75 basis point rate increase at the next Federal Reserve meeting scheduled for later this month have fallen somewhat, according to CME’s FedWatch tool. While the odds of a 50bp rate hike were still only 44%, that glimmer of hope avoiding a third straight move of 75bp helped bolster stocks Friday morning as strong bond yields eased recently. But stocks gave up those gains and closed lower on Friday. The S&P 500 was sharply lower for the week, down 3.6%. Thursday’s advance broke a four-session losing streak that began on August 26, with a terrible one-day drop of nearly 3.4% after Federal Reserve Chairman Jerome Powell in a Jackson Hole speech warned of “some pain” as central bankers continue their battle. To reduce persistently high inflation rates. This put the pedal on the metal in the scenario of a Wall Street rally of 75 basis points in September. Fast forward a week after Powell’s speech — and before the bell on Friday morning, the Labor Department reported that nonfarm payrolls grew 315,000 in August. This was just shy of expectations but still consistent. The unemployment rate in the country rose to 3.7%. Economists were looking for no change from the previous month’s 3.5%. Wage inflation eased slightly, with average hourly earnings up 0.3% in August and 5.2% from a year ago, both slightly below estimates. There seems to be something in the jobs data for everyone - thus, Goldilocks’ explanation is neither too hot nor too cold. While payrolls were good, they were below the 526,000 added in July and the lowest monthly gain since April 2021. An increase in the unemployment rate and a drop in wages - though not huge moves - also signaled a cooling in the red - a hot labor market. This is something Powell wanted to start seeing - as a number of signals, including commodity prices, point to peak inflation. The August CPI and PPI are out on September 13 and September 14, about a week before the Fed meeting on September 20-21. This is the most promising news for the bulls, although they could not win on Friday. The start of last week was tough, especially for tech stocks. Nvidia’s (NVDA) drop of nearly 7.7% on Thursday spread to the entire semiconductor pool. Thursday’s latest drop, though not as bad as it was early in the session, came after the company said late Wednesday that the US government was restricting some chip sales in China. As we wrote on Thursday, we believe there are ways Nvidia is using to mitigate the impact of the restrictions; However this was bad news. Advanced Micro Devices (AMD), which is also the club’s holding company, said the restrictions would not be material to its business. Chip stocks saw an initial modest bounce on Friday - but they also turned lower. In the oversold market this past week, according to the S&P Index, we made several purchases and some strategic sales. We have added to our latest positions Starbucks (SBUX) and TJX Companies (TJX). We were also encouraged by Thursday’s belated announcement of a new CEO. We’ve also made some purchases with high-quality tech names that we’ve loved in the long run: Amazon (AMZN), Microsoft (MSFT), Qualcomm (QCOM), and Nvidia. The Nvidia purchase was small and prior to that was an unexpected development around chip sales restrictions in China. We bought some Johnson & Johnson (JNJ) and Danaher (DHR) too. We love health-related businesses in this market as a relatively safe place where people don’t usually give up on health spending, even during tough times. We also benefited last week when oil prices jumped and we sold shares in some of our oil names: Pioneer Natural Resources (PXD) and Devon Energy (DVN). Below is a summary of the trades. Looking back, WTI rebounded on Friday to end at $87 a barrel. But overall, it was a tough week for oil, as it was down 6.7%. The US Dollar Index ended the week above 109. Gold closed at $1,720 an ounce. The 10-year Treasury yield closed at around 3.2% and the two-year Treasury yield, which hit a 14-year high this week, fell to 3.4%. The two-year yield expiring is still much higher than the 10-year yield, which is called an inversion of the yield curve which is seen as a harbinger of a recession. US markets are closed on Monday for Labor Day. The club’s stock dividend wasn’t out last week. But what the week missed in earnings, it more than made up for it in economic data, specifically job numbers. As mentioned earlier, the government on Friday posted slightly less-than-expected growth, but still good non-farm payrolls. Unemployment rose and wage growth slowed. Friday’s jobs report came two days after we got a retooled ADP employment picture for August, which showed a significant slowdown in US corporate hiring. Trapped in the middle, on Thursday, unemployment claims last week were the lowest in two months. The jobs parade kicked off Tuesday with a survey of job opportunities and labor turnover. The so-called JOLTS showed more jobs than expected in July by nearly a million. What’s Coming There is no property dividend for the club next week either. In fact, there is only one Club share left to report quarterly results this earnings season. It’s Costco (COST) on September 22 - one of the six events in September that could provide catalysts for stocks in our portfolio during this traditional market month. However, there are some companies that report quarters - GameStop (GME) and Kroger (KR) being the top companies - and a few economic reports to consider. Monday, September 5 US markets closed for Labor Day Tuesday, September 6 after the bell: GitLab (GTLB), Coupa Software (COUP) Wednesday, September 7 before the bell: John Wiley & Sons (WLY), Nio (NIO) after the bell: Asana (ASAN), AeroVironment (AVAV), Casey General Stores (CASY), Dave & Buster’s (PLAY), GameStop (GME), Verint Systems (VRNT) 8:30 a.m. ET: Trade Balance (August) 2 p.m. ET Eastern: Federal Reserve Regional Economic Activity Beige Book Thursday, September 8 after the bell: U.S. Overseas Brands (AOUT), Smith & Wesson Brands (SWBI), DocuSign (DOCU), Zscaler (ZS), Zumiez (ZUMZ) ) 8:30 AM ET: Jobless Claims (week ending September 3) 3 PM ET: Consumer Credit (July) Friday, September 9 Before the bell: Kroger (South Korea) 8:30 AM ET: Wholesale Inventories (July) (See here for a full list of stocks in Jim Cramer’s Charitable Fund.) As a CNBC Investi subscriber ng Club With Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable fund portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above investment club information is subject to our Terms and Conditions and Privacy Policy, along with our disclaimer. No fiduciary obligation or duty will be created, or be created, by virtue of your receipt of any information provided in connection with the Investment Club. There are no specific results or guaranteed profit.
Traders work on the floor of the New York Stock Exchange (NYSE) on September 1, 2022 in New York City.
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The Standard & Poor’s 500 It ended Friday lower, at its lowest closing level since July, after mounting a bid for consecutive gains earlier in the session. The first two days of September, which was historically Worst month of the year for stockswas mixed after a tough August, which has usually been a strong month for the market.