Markets Has Third Consecutive Week Down, Unemployment Rises to 3.7%, Geopolitical Woes Rising Across Globe

Good Evening:

Stocks had their third consecutive weekly decline after a positive start to Friday morning was wiped out. The market has experienced elevated volatility since Jay Powell gave the doves very little to hang onto in his Jackson Hole speech. While investors seemed initially comforted by the jobs report because it had some positive elements, like a rise in the participation rate and headline unemployment rate, that initial reaction was reversed. Some economists speculated that this should make the Fed slightly more willing to do a 50 bps raise in September rather than 75 bps. However, there is still a CPI report between now and then so this will be a major consideration as well. The Nasdaq fell 6 days in a row, the longest down streak since before COVID.

While there has been some elevated volatility since Powell’s comments it should also be noted that the VIX has not risen to levels it got to after previous hawkish developments like in the wake of recent hikes. The selling was intense directly after his speech, but still more orderly than one might have expected. Part of this is probably since sentiment is so negative and many folks were prepared for a hawkish turn especially in the fixed income markets. The rally from the June 17th lows that has since reversed ...

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