August and everything after, or what I did on my summer vacation

Time to catch up on what's happening in the markets and economy after a restful couple of weeks away from looking at financial news.

Greetings. My last post was on August 9. I intended to write something about the markets and economy before this, but I came down with the dreaded affliction known as lazy, hazy late summeritis. (Perhaps I should have used the headline of “IWon’tWork” for my most recent missive on poor penny stock WE.)

It’s been a fun few weeks of largely staying off social media though. I’ve (mostly) avoided business news. Saw two great concerts with my wife. (Band of Horses and The Revivalists in Brooklyn and The Strokes in Forest Hills. Gen X do or die!) Went up to Maine last week (lobsters were eaten and whales were watched) with the family after a brief stop in Salem, Mass. to go to the Witch Museum. Even saw a Red Sox double-A Portland Sea Dogs baseball game! The stadium has a replica Green Monster. I bought this Maine Whoopie Pies hat.

My only major August complaint? Being attacked by spotted lanternflies nearly every time I stepped outside. Fortunately, my 10-year old son always enjoyed mercilessly swatting them away and then stomping them to death before they could harass me further or, oh yeah, infest trees and other plants.

But now that summer is winding down, it’s time to get back on the proverbial return to normal routine horse. I went to the gym yesterday for the first time in more than a month. (Eased my way back in with a half hour of cardio on the recumbent bike.) Getting my boys ready for the start of school next week. (Last year of elementary and freshman year of high school.) And yes, it’s time once more for missives about business news. The jobs report is tomorrow after all!

I’m going to avoid the usual business news hyperbole and not try to convince you that THIS IS THE MOST IMPORTANT JOBS REPORT IN THE HISTORY OF MANKIND. But this will be a key data release to watch. Economists surveyed by Reuters are forecasting that 170,000 jobs were added in August. That’s still healthy but it would be a slowdown from the 187,000 figure from July, which wouldn’t necessarily be the worst thing for the markets.

Wall Street is hoping that the labor market continues to gradually cool off. A slower pace of hiring is exactly what the Federal Reserve needs/wants to see in order to justify an end to its aggressive rate hiking spree of the past year or so. Rates now stand at a range of 5.25% to 5.5%. Traders are banking on a nearly 90% chance that the Fed holds rates steady at its September 20 meeting but it’s currently a toss up as to what the Fed does in November. Consumer prices remain elevated after all. Inflation hasn’t been totally whipped yet.

The stock market has tumbled in August due to this uncertainty but is still up sharply for the year. Can the bull keep raging? Investors have to watch the data. If inflation pressures subside AND the job market doesn’t show signs that it is about to fall off a proverbial cliff, then investors’ hopes for a so-called “soft landing”, in which the economy moderates but doesn’t slide into recession, will intensify. So keep close tabs on Friday’s numbers before taking off to enjoy the long Labor Day weekend and one last bit of summer fun.