U.S. and World News
- Following the Federal Reserve’s annual economic policy conference in Jackson Hole, Wyoming last week, investors are still divided over whether the U.S. central bank will hike rates at their September meeting. With Fed Chairwoman Janet Yellen absent, Vice Chairman Stanley Fischer was careful to announce he wasn’t signaling an impending rate rise but his remarks at the summit suggest a September move hasn’t been ruled out. The mixed data from August’s employment report adds further uncertainty to the timing of ‘liftoff’.
- China’s markets remained volatile early this week before closing for Thursday and Friday’s sessions due to a giant military parade marking the 70th anniversary of the end of World War II. Meanwhile, China’s government is on the hunt for ‘confessions’ as nearly 200 journalists, traders and officials have been punished in a ‘special campaign’ to root out those accused of market destabilizing activities, such as reporting drops in the Chinese stock market.
- Equity markets trended downward again this week. The S&P 500 ended the week down 3.36%, closing at 1,921. Similarly, the Dow Jones fell 3.21% and closed at 16,102. Year to date, the S&P is down 5.35% and the Dow is down 8.04%.
- Yields in the Treasury markets fell this week. The 10 year Treasury bond now yields 2.13% while the 5 year Treasury bond now yields 1.47%.
- The spot price of WTI Crude Oil gained a bit in another very volatile week. Prices rose by 1.04%, closing at $45.69 per barrel. In 2015, WTI Oil prices are down 21.40%.
- The spot price of Gold declined this week, falling 1.04% and closing at $1,121.85 per ounce. Year to date, gold prices are down 5.28%.
- Initial jobless claims came in at 282,000 which was an increase from the prior week’s figure of 271,000. The Labor Department noted that there were no special factors that affected the claims figure. The four week moving average for claims now stands at 275,500.
- The monthly non-farm payroll employment report showed a gain of 173,000 jobs in August, less than consensus estimates of 218,000. June and July’s employment additions were revised upwardly by a combined 44,000.
- The headline unemployment rate dipped to 5.1%, from 5.3% in July. Meanwhile, the labor force participation rate was unchanged at a still historically low 62.6%.
- Average hourly earnings surprised to the upside, showing a gain of 0.3% in August. This brings the one year rate of earnings growth up to 2.2%.
Fact of the Week
- China’s national debt has quadrupled from $7 trillion in 2007 to $28 trillion today, fueled by real estate and shadow banking. (Source: McKinsey and Company)
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