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Market Summary

U.S. stock markets  opened lower after the Labor Day holiday, two days since the Trump administration imposed tariffs of 15% on thousands of goods made in China. The average tariff on Chinese goods is now over 21%.   Among the products affected are clothing, food, lawn mowers, cereal bowls and Laptops. Beijing responded with tariffs of its own on American goods, and yesterday filed a new complaint with the World Trade Organization. The tariffs will cost American households an average of $460 a year, according to the NYT.com.  

The major indexes logged their first losing month since May and their second losing month of 2019. The S&P 500 dropped - 1.8%, Dow was down -1.7% and the Nasdaq slid -2.6% for the month.

Hurricane Dorian, one of the most powerful Atlantic storms on record, is continuing to smash the Bahamas with deadly winds and rain.  At least five people were confirmed dead as of this morning, with storm surges of 12 to 18 feet above normal tide levels continuing. Thousands of homes were believed to be damaged or destroyed on Abaco Island, east of Grand Bahama. It’s currently a Category 3 storm, after having reached Category 5 status when it made landfall on Sunday. Insurers could face up to $25 billion in losses from the storm, according to estimates from UBS yesterday. And Florida’s agriculture industry may suffer hundreds of millions of dollars in lost revenue. Hurricane Dorian is expected to move slowly northward  today.  A hurricane warning was extended for 240 miles of the Florida coast yesterday and airlines have already canceled more than 1,500 flights.

Market watchers will be able to gauge the strength of the US labor market the Friday when the August jobs numbers are released. Economists polled by Bloomberg are expecting the US economy to have added 159,000 jobs.   There is a full slate of Fed speakers this week, starting with Boston Fed’s Eric Rosengren tonight.  Chicago Fed President Evans speaks tomorrow also.  Chair Powell rounds out the week with a speech on the economic outlook in Zurich. Markets are expecting another rate cut of between .25 to .50% next month.

US Economy – The Week Ahead

Tuesday, 9/3/2019

  • ISM Manufacturing PMI – Consensus Estimate: 51.4 (0.4% MoM), Prior Month: 51.2 (-1.7% MoM)

Wednesday, 9/4/2019

  • Trade Balance – Consensus Estimate: -$51.2B, Prior Month: -$55.2B

Thursday, 9/5/2019

  • ADP Employment Survey – Consensus Estimate: 134,000, Prior Month 156,000
  • Labor Productivity Growth Quarter-over-Quarter for 2Q19 (Final) – Consensus Estimate: 2.3%, Prior Month: 3.5%
  • ISM Non-Manufacturing PMI – Consensus Estimate: 55.4 (3.2% MoM), Prior Month: 53.7 (-2.5% MoM)

Friday, 9/6/2019

  • Hourly Earnings Growth Year-over-Year – Consensus Estimate: 3.2%, Prior Month: 3.2%

  • U.S. Unemployment Rate – Consensus Estimate: 3.7%, Prior Month: 3.7%

  • Nonfarm Payrolls Added – Consensus Estimate: 147,000, Prior Month: 164,000

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