And as far as markets are concerned, we are all currently weathering a very active “global market hurricane season” which has been far from the normally sleepy market doldrums most of us are used to in the late summer.
We were reminded of that volatility again this week as stocks fell roughly 3% yesterday.
Looking back, it has been a much busier summer than normal – as there has been a lot to monitor, analyze and explain. August was the most volatile month for the markets in years, commodities have crashed, and we are now getting very close to the first rate hike in nearly 10 years.
But whether that rate-hike happens in two weeks or not, largely depends on this Friday’s jobs report, so you need to know what to look for in the data and how to position client portfolios in order to finish the year strong.
It’s a reminder that the reality is today’s highly correlated, global markets never really close, and as a financial professional your clients expect you to be on top of the markets 24/7.
That is why we created The Sevens Report, so that our subscribers including financial advisors, hedge fund managers, and entire trading desks, can make sure they have an independent analyst that communicates with them every day and quickly identifies for them the risks and opportunities for:
- Commodities, and
- Interprets what economic data means for the market.
All in under 7 minutes every morning, every trading day.
The Sevens Report is the daily market cheat sheet our paying subscribers have used to help them weather the recent “global market hurricane” we have all been dealing with. The daily morning report keeps them up on the markets, helps them to seize opportunities, and most importantly right now, helps them avoid risks as they navigate these volatile market conditions.
We firmly believe we offer the best value in the independent research space.
Tomorrow’s jobs report is now the most important economic indicator to watch ahead of the September FOMC Meeting on September 17th as Fed outlook has unfortunately become even cloudier recently after policy makers failed to offer any additional clarity after the Jackson Hole symposium as we had hoped.
With that in mind, I wanted to provide our “Jobs Report Preview,” which was delivered to paid subscribers in this morning’s edition of The Sevens Report, so that you know quickly and directly what will make tomorrow’s report good or bad for the markets.
Jobs Report Preview (Sevens Report Excerpt)
This jobs report will decide whether the Fed hikes in September, or delays to October or December (or 2016). Given all of the recent stock market volatility, the bar for a hike in September is pretty high, but not unattainable.
If the jobs number is “Too Hot” look for that to initially weigh on stocks, but I don’t think it’ll be a major bearish influence, and it would actually make me more positive on growth sectors here in the US because the hike will imply a decent level of confidence in the economy from the Fed.
If the number is “Too Cold” or “Just Right,” expect an initial dovish reaction and a stock rally. That will not, however, be a catalyst for a sustained rally in stocks as Fed uncertainty will be with us for months to come. While that won’t cause stocks to trade lower by itself, it will be a headwind on markets going forward, and it will reduce the potential for a year-end rally.
The “Too Hot” Scenario (What it Takes to Hike in September)
· > 275k Job Adds. If we see a 275k or higher jobs report, the chances of a hike in September will likely go back above 50% (although barely so) making a September rate hike basically a coin flip (which is not priced into stocks right now).
· < 5.2% Unemployment Rate, ≤ 10.5% U-6 Unemployment Rate. In the March statement the Fed lowered “NAIRU” to 5.0% and below, so it’s going to take a material drop in the unemployment rate (brininging it close to 5%) to increase the chances of two Fed rate hikes.
· > 2.4% yoy wage increase. Data on wage gains has wavered recently, so it’ll take an almost impossible jump in the yoy wage numbers to make the Fed consider two hikes.
The “Just Right” Scenario (No Hike But Oct. or Dec. Still Likely)
· 160k—270k Job Adds, 5.4%-5.6% Unemployment Rate, 2.1% – 2.3% YOY wage increase. The range for this number to be “just right” or “Goldilocks,” is pretty wide, and anything in this range likely means no hike in September, but still a high probability of a hike in October or (more likely) December.
The “Too Cold” Scenario (No Hike in 2015)
· < 150k Job Adds, ≤ 2.1% yoy wage increase. This number will be technically “dovish” but it’s not a positive for stocks or the economy, so fade any material rally on a number this weak. The Fed wants to get at least one hike in, and if the job market starts to soften and the Fed feels the economy isn’t strong enough for one hike, that’s not going to be good for risk assets.
Make More Money, Save Time, Have More Knowledge
Again, this is a results business. Our job is simple – wake up every day and try to find fundamentally based, attractive risk/reward set ups that we think can make money. We did it in both 2013 and 2014, and I’m confident we can continue to do it in 2015.
My job, not just through this latest jobs report and upcoming Fed meeting, but through all sorts of market tumult, is to provide you the timely, need-to-know, critical information that will demonstrate to your clients:
1) That you are on top of the markets, and
2) That you are in control of their financial situation.
Actual subscribers to The 7:00’s Report have told me that discussing the information contained in the Report with prospective clients has helped them land accounts as big as 25 Million Dollars!
And, it takes just one new $80,000 dollar account to cover the cost (based on a conservative 1% management fee).
2015 is going to continue to be a volatile year. Subscribe today and give yourself the market intelligence you need to help strengthen relationships with your current clients, and acquire new ones.
Subscriptions start at just $65 per month, billed quarterly, and with the option to cancel any time prior to the beginning of the next quarter, so there’s simply no reason why you shouldn’t subscribe to The 7:00’s Report right now.
If you want to make your business more successful, you have to possess unshakeable confidence in your knowledge, and helping you acquire that knowledge is what The 7:00’s Report is all about. Begin your subscription to The 7:00’s Report right now by simply clicking the button below:
Finally, everything in business is a trade-off between capital and returns.
Editor of The 7:00’s Report