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July’s employment data released back in early August triggered a market sell-off. So the market will probably be closely watching this Friday’s report on jobs growth and unemployment rate for August.
Or at least that is what most media outlets are reporting. Does past data like this actually influences the market to trade up or down? Doesn’t the market trade on future expectations of profitability? Regardless of which, this Friday’s event is certainly going to increase volatility.
Besides the Jobs Report, here are 4 other things to consider:
- The S&P500 is presently near its highs for this year and has already all but recovered from last month’s sell-offs.
- September is traditionally regarded as a volatile trading month – investors returning from summer vacation looking to lock in gains or tax losses before year end. It doesn’t matter whether this is actually true or not. The market knows about this general belief and so it acts with this knowledge.
- US Treasury Yields have fallen and are expected to fall even further. Expectations of the US Federal Reserve slashing interest rates later this month have also caused the US dollar to drop against most other currencies.
- The VIX (Volatility Index) is holding steady at 15.55.
We would wait till next week before taking any directional action, but booking in some profits now would not be a bad idea.