Thoughts to Ponder and the Market Update September 9

Thoughts to Ponder . . .

• Dogs feel very strongly that they should always go with you in the car, in case the need should arise for them to bark violently at nothing, right in your ear.
• We all have baggage, find someone who loves you enough to help you unpack.
• Diet rule #1: If nobody sees you eating it, it doesn’t contain any calories
• Cleaning the house while your kids are still home is like shoveling while it’s still snowing.

And now on to the Market Update . . .

With little news to trade on this week, the stock market has been remaining in a narrow range. Next week the markets are likely to continue not to have large swings as significant economic data doesn’t really get reported until the third week of September.

There continues to be much speculation on what the Fed intends to do regarding interest rates. As much as many of the Fed board members have indicated that they would like to see interest rates starting to rise, there continues to be mixed information as to how the economy is really doing. If the Fed does make a decision to increase interest rates, the rate hike will be very small.

The Mortgage Bankers Association of America reported minimal increases in both purchase and refinance applications. Despite mortgage rates remaining at historic lows, applications for both only increased by 1 percent. Some experts speculate that the reason for the minimal increase is due to the return of the school year as well as the general public getting back into the swing of work after end of summer vacations.

One of the new measurements that the Fed pays attention to is called the Labor Market Conditions Index. This index is an experimental indicator by the Federal Reserve to track labor market activity. This is just one of many pieces of data that the Fed uses in making interest rate decisions. Most recently the index has slept into negative territory which means the labor market maybe beginning to contract.

Last week the Labor Department reported only a 151,000 increase in nonfarm payrolls. Analysts were expecting 175,000. The prior month payrolls increased 275,000, so this significant decline is just another factor the Fed has to weigh in making their decision on interest rates at the next FOMC meeting.

First Time jobless claims remained low at 259,000. For well over a month claims have been remaining in a narrow range. Claim numbers below 300,000 are considered strong for the labor market. Since first time jobless claims remain low but new hiring remains low as well, the question is arising as to are more people leaving the workforce.

The final labor market report for the week, known as the JOLTS report, tracks job openings and offer rates on hiring and people quitting. The latest report shows job openings remain very high at 5.871 million. The challenge for employers is that it appears that workers continue to remain reluctant to change jobs.

Gas prices continue to remain low as petroleum inventories are still 11.7 percent higher than the same time last year. The price for a barrel of oil remains in the mid 40’s.

This week’s potential market moving reports are:

• Wednesday September 14^th – MBA Mortgage Applications
• Thursday September 15^th – First Time Jobless Claims, PPI, Retail Sales, Industrial Production
• Friday September 16^th – Consumer Price Index