Finimize - 🇺🇸 The US job market needs some work

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Today's big stories

The US jobs market continued to show strength in September
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Chipmaker TSMC defied the industry slump to post bumper quarterly sales

US Employment’s Still Riding Too High

What’s Going On Here?

Data out on Friday showed that the US economy added more jobs than expected last month.

What Does This Mean?

There had been a couple small signs that the Federal Reserve’s (the Fed) aggressive interest rate hikes might've started chilling the hot-to-touch jobs market down. For one, data out earlier in the week showed that cautious employers slashed more than a million job openings in August – one of the biggest drops in two decades. And for another, Friday’s report showed the US added only 263,000 jobs in September, the lowest monthly figure since April 2021. But that’s still not enough: demand for workers has calmed down a bit, but many businesses are still under-staffed, and forced to compete for workers in what’s still a shrinking labor force. That might be why the handy litmus test of wage growth – something the Fed’s trying to tame to help rein in inflation – still came in at a strong 5% versus the same time the year before.

Why Should I Care?

The bigger picture: The Fed wants to fire you.
The unemployment rate unexpectedly fell to a new 50-year low of 3.5% last month. But with the Fed's prediction for that figure to hit 4.4% next year, there's a good chance the central bank will take action to make that reality. After all, it’s said that taming inflation won’t just require “below-trend” growth, but straight-up job losses. That’s why most traders are now pricing in a fourth-straight 0.75 percentage point hike next month.

For markets: Investors say yikes.
The S&P 500 fell when the news broke, as investors anticipated even more pain for US companies and the wider economy. And that might not be the end of the turmoil for a market that's just seen its worst September in 20 years: a slew of banks from Goldman Sachs to HSBC reckon the index will be lower at the end of the year than it is now.

You might also like: How to invest when everything is falling.

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Analyst Take

Early Birds Are Great, Sure, But Stocks Love A Night Owl

By Luke Suddards, Analyst

The early bird is known to get the worm, but it often pays to be an investing night owl.

See, something happens between the time the New York Stock Exchange closes for the night and opens the next morning – and whatever it is, it tends to nudge stocks higher.

In the market, it’s often referred to as the “night effect”.

And now a new exchange-traded fund is seeking to capitalize on those after-hour gains.

That’s today’s Insight: how a new ETF could make you money while you sleep.

Read or listen to the Insight here

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