In this week’s recap: an index of manufacturing activity
hits a 10-year low, the jobless rate falls to a 50-year low, and the Nasdaq
Composite outperforms the S&P 500 and Dow Jones Industrial Average.
Weekly Economic Update
THE WEEK
ON WALL STREET
The
fourth quarter started with a mixed week for equities. A slip for an index of
U.S. manufacturing activity proved to be a market mover, more so than the
latest jobs report.
The
Dow Jones Industrial Average lost 0.92% for the week; the S&P 500, 0.33%.
In contrast, the Nasdaq Composite improved 0.54%. Overseas stocks pulled back:
the MSCI EAFE index dipped 2.60%.1,2
Attention
on Manufacturing
The
Institute for Supply Management’s Manufacturing Purchasing Managers Index fell
to 47.8 in September, its lowest level in ten years. Traders worried that the
number reflected weakening business confidence. ISM’s latest Non-Manufacturing
PMI also declined, but the 52.6 reading indicated growth in the service sector
last month.
ISM
does state that when a PMI is above 43.2, the overall economy is typically
still expanding, even if a specific sector is not. Another widely watched Factory
PMI, maintained by IHS Markit, rose to a five-month peak of 51.1 in September;
a number above 50 indicates factory output is increasing.3,4
Lowest
Unemployment Rate in 50 Years
The
Department of Labor said that employers added 136,000 net new workers in
September. Unemployment was at 3.5%, a level last seen in December 1969. The
U-6 jobless rate, which counts both the unemployed and underemployed, fell to a
19-year low of 6.9%.
Monthly
job creation has averaged 161,000 so far in 2019, down from 223,000 in 2018.
This may reflect the challenge companies face trying to fill job openings in an
economy with so little unemployment. Annualized wage growth fell to 2.9% in
September, the smallest yearly advance recorded since July 2018.5
What’s
Next
Trade
representatives from the U.S. and China return to the negotiating table on
Thursday; their meeting is scheduled to conclude on Friday. Any news stemming
from their talks could quickly affect equity markets here and abroad.
T I P O F
T H E W E E K
If you are nearing retirement age, ask your employer if it allows phased retirements. More companies are offering this option, which gives a worker the flexibility to shift from full-time to part-time hours on the way to retiring.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Tuesday: Federal Reserve Chairman
Jerome Powell speaks at the annual meeting of the National Association for
Business Economics in Denver.
Wednesday: The Federal Reserve
publishes the minutes from its September meeting.
Thursday: The Bureau of Labor
Statistics presents the August Consumer Price Index, showing monthly and yearly
inflation data.
Friday: The University of
Michigan offers its preliminary October Consumer Sentiment Index, a measure of
consumer confidence levels.
Source:
Econoday, Federal Reserve, October 4, 2019
The Econoday and Federal Reserve economic calendars list upcoming
U.S. economic data releases (including key economic indicators), Federal
Reserve policy meetings, and speaking engagements of Federal Reserve officials.
The content is developed from sources believed to be providing accurate
information. The forecasts or forward-looking statements are based on
assumptions and may not materialize. The forecasts also are subject to revision.
THE WEEK
AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: Domino’s (DPZ)
Thursday: Delta Air Lines (DAL)
Friday: Citigroup (C), Fastenal
(FAST)
Source:
Zacks.com, October 4, 2019
Companies
mentioned are for informational purposes only. It should not be considered a
solicitation for the purchase or sale of the securities. Any investment should
be consistent with your objectives, time frame, and risk tolerance. The return
and principal value of investments will fluctuate as market conditions change.
When sold, investments may be worth more or less than their original cost.
Companies may reschedule when they report earnings without notice.
Q U O T E O F T H E W E E K
“When anger rises,
think of the consequences.”
Kong Qui (Confucius)
T H E W E E K L Y
R I D D L E
Tamara donated $1 million
to a charity. After she donated all that money, she was a millionaire.
Can you explain this?
LAST WEEK’S
RIDDLE: Which is heavier, a pound of lead or a pound of silver?
ANSWER: Neither;
they both weigh one pound.
Troy L Thompson, CFP may be
reached at 515-432-5421 or troy@troythompsoninc.com
troy@thompsonfinancialinc.com
troy@thompsonfinancialinc.com
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someone who could use information like this?
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Troy Thompson, CFP
DBA Thompson Financial and Hanson Asset Strategies
Securities offered through FIRST HEARTLAND CAPITAL, INC.
Member FINRA & SIPC.
Thompson Financial is not affiliated with FIRST HEARTLAND
CAPITAL, INC.
This material was prepared by MarketingPro, Inc., and does
not necessarily represent the views of the presenting party, nor their affiliates.
The information herein has been derived from sources believed to be accurate.
Please note - investing involves risk, and past performance is no guarantee of
future results. Investments will fluctuate and when redeemed may be worth more
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service, and should not be relied upon as such. All market indices discussed
are unmanaged and are not illustrative of any particular investment. Indices do
not incur management fees, costs and expenses, and cannot be invested into
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1 - wsj.com/market-data
[10/4/19]
2 - quotes.wsj.com/index/XX/990300/historical-prices [10/4/19]
3 - tinyurl.com/y296rohg
[10/2/19]
4 - investing.com/news/economic-indicators/newsbreak-ism-services-index-tumbles-to-3year-low-1991459
[10/3/19]
5 - tinyurl.com/y6s8emsr
[10/4/19]
CHART CITATIONS:
quotes.wsj.com/index/XX/990300/historical-prices
[10/4/19]
quotes.wsj.com/index/SPX/historical-prices
[10/4/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019
[10/4/19]
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