U.S. equities dropped as trade fears are revamped from Trump’s threats to tack on more tariffs to Chinese imports. Interest rates jumped amid a better than expected jobs report, with the 10-year treasury yield rising 9 basis points to 2.94%. The spread between the 10-year treasury yield and 2-year treasury yield also rose, widening by 2 basis points to 0.22%. The price of gold was little changed, dropping only 0.38% to $1,201.70 an ounce. The price of crude oil dropped 2.88% to $67.89 a barrel as it was pulled down by a stronger U.S. dollar. That said, the U.S. dollar index rose from 95.08 to 95.38.
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THIS WEEK’S HIGHLIGHTS
- The ISM manufacturing index, rose over 3 points in August to 61.3. Most of the rise came from an unexpected surge in new orders, but was also supported by a very strong rise in production. 16 of the 18 industries tracked in the ISM manufacturing index posted monthly expansions.
- The U.S. trade deficit in goods and services grew $3.8 billion larger in July to a five-month high of $50.1 billion. Exports of goods and services fell by 1.0% to $211.1 billion. Additionally, imports increased by 0.9% to a record $261.2 billion. More specifically, the U.S. trade deficit with China surged 10% to a record $36.8 billion.
- Initial unemployment claims dropped by a significant 10,000 to 203,000 for the week ending September 1st. However, the less volatile 4-week moving average of initial unemployment claims only dropped by 2,750 to 209,500. Both the actual and 4-week average are the lowest seen since December of 1969. Continuing unemployment claims also moved lower, dropping 3,000 to 1.71 million.
- The U.S. added 201,000 jobs in August, beating expectations of 195,000. Despite an increase in jobs, the unemployment rate was held at 3.9% as the labor participation rate dropped. The average hourly earnings rose 0.4% in August for a year-over-year change of 2.9%, the highest growth rate since 2009.
QUOTE OF THE WEEK
“A good financial plan is a road map that shows us exactly how the choices we make today will affect our future.”
– Alexa Von Tobel
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