This week, skittish investors ready to sell stocks at any sign of a rate hike will watch the jobs report on Friday. At the Jackson Hole symposium last week, Fed Chair Kevin Warsh pointed to persistently high inflation as an uncomfortable situation. Though he mentioned the healthy job market, inflation above the Fed’s target weighed on his commentary.
The bond market reacted swiftly. The US 10-year Treasury yield topped 4.73%. The yield is up by around 50 basis points compared to the start of the year. The 20+ year Treasury bond ETF (TLT) also fell. Buyers lifted TLT stock from a $81.17 low in mid-August to nearly $83. However, the ETF faces resistance near $84.
Friday’s job report might reveal weakness for August. In July, the government posted nonfarm payroll employment falling by 23,000. Local government education job cuts of 50,000 led the decline. Bank stocks might face selling pressure. The increasing odds of a rate hike to ease inflation, while having little impact on the job market, would pressure JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C).
The valuation for the AI business in SpaceX (SPCX) might face pressure. OpenAI said that it would not renew its deal with Cursor. The company cited that SpaceX did not comply with its terms of service. Cursor’s access to OpenAI models will end on November 12.
Related Stories
