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As we mentioned in this space ahead of today’s opening bell, a calendar change has not helped market conditions. While we all welcomed the end of a difficult September, the reasons behind said difficulty have clearly not diminished. The Dow, now down in six of the past seven sessions and negative year to date, lost -430 points today, -1.29%. The Nasdaq, off session lows by around 50 points, still lost -248 points, -1.87%. The S&P 500 and Russell 2000 shed -1.37% and -1.59%, respectively.
Job Openings and Labor Turnover Survey (JOLTS) numbers for August weren’t any help. Released this morning after the open, a cranking-up in both job openings and job quits pointed to a robust labor force defying the Fed to raise interest rates higher — which then seemed to lead to a higher 10-year bond yield, putting further pressure on stocks. August Job Openings reached 9.61 million this morning, way up from the 8.8 million projected and the upwardly revised 8.92 million the previous months.
But of the JOLTS data, the Job Quits tend to spell a clearer picture than Job Openings. Here we saw a higher-than-expected 3.64 million, up from a raised revision the prior month to 3.62 million. These are still the lowest we’ve seen in the past 12-month cycle, with July’s tally still representing a 2 1/2-year low. Overall Quits Rate is unchanged at +2.3%, the lowest since January of 2021.
Another headwind we may be seeing presently does not seem to have any sort of clear solution — at least not until the 2024 election 13 months from now. Right as I type this, the U.S. House of Representatives is deciding whether to ouster the Speaker of the House, Kevin McCarthy (R-California). Yet he’s mostly fighting — and has been since he finally was voted in as Speaker — his own party in the House. There is no clear alternative to a new Speaker.
Those in his party against his tenure, led by Florida Rep. Matt Gaetz, are extremely unlikely to select a new Speaker that would win the votes of the rest of the Republican party, let alone the Democrats. And if McCarthy is ousted without a new Speaker, no business on that side of the Legislature on Capitol Hill will occur. This is aggravated by a ticking clock on a government shutdown — a can deftly kicked by a deal made by McCarthy and Democrats (which was likely the final straw in Gaetz’s small group to oust him), but now has only 40-some-odd days before that clock runs out again.
Even big jobs numbers, tomorrow from ADP (ADP - Free Report) and Friday from the federal government, might not contain big enough news to counteract this dysfunction at the nation’s capitol. We could see the most Goldilocks numbers of all time and still not see relief in the equities market…
Image: Shutterstock
GOP Speaker Ousted, Markets Fall Again
As we mentioned in this space ahead of today’s opening bell, a calendar change has not helped market conditions. While we all welcomed the end of a difficult September, the reasons behind said difficulty have clearly not diminished. The Dow, now down in six of the past seven sessions and negative year to date, lost -430 points today, -1.29%. The Nasdaq, off session lows by around 50 points, still lost -248 points, -1.87%. The S&P 500 and Russell 2000 shed -1.37% and -1.59%, respectively.
Job Openings and Labor Turnover Survey (JOLTS) numbers for August weren’t any help. Released this morning after the open, a cranking-up in both job openings and job quits pointed to a robust labor force defying the Fed to raise interest rates higher — which then seemed to lead to a higher 10-year bond yield, putting further pressure on stocks. August Job Openings reached 9.61 million this morning, way up from the 8.8 million projected and the upwardly revised 8.92 million the previous months.
But of the JOLTS data, the Job Quits tend to spell a clearer picture than Job Openings. Here we saw a higher-than-expected 3.64 million, up from a raised revision the prior month to 3.62 million. These are still the lowest we’ve seen in the past 12-month cycle, with July’s tally still representing a 2 1/2-year low. Overall Quits Rate is unchanged at +2.3%, the lowest since January of 2021.
Another headwind we may be seeing presently does not seem to have any sort of clear solution — at least not until the 2024 election 13 months from now. Right as I type this, the U.S. House of Representatives is deciding whether to ouster the Speaker of the House, Kevin McCarthy (R-California). Yet he’s mostly fighting — and has been since he finally was voted in as Speaker — his own party in the House. There is no clear alternative to a new Speaker.
Those in his party against his tenure, led by Florida Rep. Matt Gaetz, are extremely unlikely to select a new Speaker that would win the votes of the rest of the Republican party, let alone the Democrats. And if McCarthy is ousted without a new Speaker, no business on that side of the Legislature on Capitol Hill will occur. This is aggravated by a ticking clock on a government shutdown — a can deftly kicked by a deal made by McCarthy and Democrats (which was likely the final straw in Gaetz’s small group to oust him), but now has only 40-some-odd days before that clock runs out again.
Even big jobs numbers, tomorrow from ADP (ADP - Free Report) and Friday from the federal government, might not contain big enough news to counteract this dysfunction at the nation’s capitol. We could see the most Goldilocks numbers of all time and still not see relief in the equities market…
…Just breaking: Kevin McCarthy has been ousted, by a House vote of 216-210. Stay tuned.
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