Market Update: Friday, October 5, 2018


Daily Insights

  • Payroll growth slows, and unemployment rate falls to 48-year low. September’s jobs report showed nonfarm payrolls grew 134K last month, below consensus estimates for 185K growth. While the increase in jobs was the smallest in a year, Hurricane Florence’s landfall likely weighed on growth last month. Slowing jobs growth is also a sign of a tight labor market at this point in the cycle. The unemployment rate fell to a 48-year low, further reflecting a solid labor market. Average hourly earnings grew 2.8% year-over-year, near the strongest growth of the economic cycle. On the LPL Research blog today, we’ll review today’s jobs data and explain why we think wage pressures remain manageable (even as they hit cycle highs).

  • Oil rebounds, set for solid weekly gain. Despite sliding nearly 3% yesterday as traders questioned the extent to which looming U.S. sanctions against Iran would dent global supply, WTI crude oil prices are ticking modestly higher this morning and are poised to end the week at levels not seen in four years (~$75/barrel). As noted yesterday, we don’t see much upside to prices from here given the U.S.’ ability to respond to supply shortages (once temporary bottlenecks are worked out of the supply chain) and the pressure being applied by the Trump Administration to Russia and OPEC members to utilize spare capacity.

  • Chinese tech firms sell off in hacking scandal. Though the Shanghai Composite is closed this week for Golden Week, the Hang Seng tumbled more than 4% on the week following a recently released Bloomberg report that accused China of inserting tiny chips into hardware during the manufacturing process in order to infiltrate U.S. technology companies and compromise the supply chain. Recent strong economic data in the U.S. and rising concerns about the impact of the trade tensions on China’s economy also contributed to the equity weakness, though our expectation remains for the two countries to come to terms without the situation escalating to an all-out trade war.


Click Here for our detailed Weekly Economic Calendar


  • Trade Balance (Aug)
  • Change in Nonfarm Payrolls (Sep)
  • Unemployment Rate (Sep)
  • Japan Leading Index (Preliminary, Aug)


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Index data obtained via FactSet


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