The Bureau of Labor Statistics posted August nonfarm payroll data that virtually assured an interest rate cut later this month.
The BLS posted jobs increasing by 22,000. Unemployment rose by 10 bps to 4.3%. The job revision for June is troubling. June employment was revised down by 27,000, from +14,000 to -13,000. In July, however, the job count increased by 6,000, from 73,000 to 79,000.
U.S. Treasury bond yields fell in response. The 20+ treasury bill ETF (TLT) traded close to $89, a level not seen since late April. IEF stock also rose, adding around 0.5%.
Investors should exercise caution when holding cyclical mining stocks. Prices may fall as demand weakens. Still, shares of Teck (TECK) and Freeport-McMoRan (FCX) are on an uptrend. Conversely, energy stocks like Exxon (XOM), Chevron (CVX), and ConocoPhillips (COP) are dipping.
Energy prices weaken when the global economy worsens. Additionally, OPEC+ planned to increase output, hurting prices.
Bank stocks face selling pressure. A weak economy will lower trading volumes, while banks will face fewer deals. Look out for Wells Fargo (WFC), Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), Charles Schwab (SCHW), and JPMorgan Chase (JPM) shares trading lower.
Tech stocks risk pulling back. A weaker economy hurts the P/E multiples for companies like Microsoft (MSFT), Amazon (AMZN), and Palantir (PLTR).
