Disaster it is! Only 130,000 jobs were added in August and July, which was already a weak 148,000, has been revised down to 131,000 so, even with that – we're worse than last month! Hourly earnings, on the other hand, jumped 0.4% – double what was expected by leading Economorons and that simply means employers are paying the same workers more money for the same output – something we already knew from the Productivity and Payroll Reports earlier in the week – that can't possibly be good for Corporate Profits.
That should take some steam out of the index runs and we're topping out at 26,850 on the Dow (/YM), 2,990 on the S&P (/ES), 7,900 on the Nasdaq (/NQ) and 1,525 on the Russell (/RTY) which would be a shame as we had predicted 27,000, 3,000 and 8,000 as the shortable tops (with the Russell too crazy to predict).
Still, it's been a fantastic 2-week run and most likely we drift along up here, into the Fed, just like we did into the July 31st announcement when they gave us a 0.25% rate cut and the markets promptly fell off a cliff. Anything but another 0.25% cut on Sept 18th will send us right back to the lows and I'm not sure even a quarter-point cut will save us from another correction in any case.
We had a good, technical week and I doubt today's number will do too much damage as it keeps the Fed on the table so we're back to waiting on the Fed – again.
