http://www.marketwatch.com/story/us-stocks-futures-fall-weekly-drop-in-sight-as-jobs-report-looms-2015-09-04Selling on Wall Street accelerated on Friday after the official monthly jobs report for August was viewed as solid enough for the Federal Reserve to consider an interest-rate hike in September.
Friday’s losses added to declines earlier in the week, putting the main indexes on track to record weekly losses of more than 3%
The S&P 500 SPX, -1.66% slid 30 points, or 1.4% to 1,922, on Friday, with losses across the board.
The Dow Jones Industrial Average DJIA, -1.80% dropped 256 points, or 1.6%, to 16,118 with all 30 components trading lower.
The Nasdaq Composite COMP, -1.16% slumped 50 points, or 1% to 4,683.
Widely seen as the last notable economic report before the Federal Reserve decides whether to raise interest rates at its two-day meeting on Sept. 16-17, the jobs data showed the U.S. economy added 173,000 non-farm jobs last month while the unemployment rate dropped to 5.1%.
“The Fed has been clear about wanting to raise rates this year and at least now they have a green light if they decide to do so,” said Kate Warne, investment strategist at Edward Jones.
“Raising rates at the September meeting would give markets clarity that they seek. But whether the Fed raises or holds, the bigger issue with China’s slowdown will still remain with us,” Warne said
While the headline number of 173,000 was less than the consensus estimate, gains for July and June were revised upward by a combined 44,000. The unemployment rate fell to 5.1% from 5.3%, marking the lowest level since April 2008 just as the Great Recession was setting roots.
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The Fed wants to raise rates, and frankly I can't see the big rush why, the thing they are seeing that alarms them. Oil is dropping, gas prices are starting their fall/winter drop. Both have tanked from their highs. The Fed seems to think employment is great - we're barely creating enough jobs to cover population growth, and what is being created is significantly part time. The economy itself is barely churning along, while China has cooled and devalue. Even our deficit has narrowed.
OTOH, the market is pissing and protesting too much over a .25% increase. It's not that big of deal. Even if people rush to bonds it will ultimately be a short lived phenomenon that will fairly quickly make stocks competitive again. I also do see Chinese money potentially flooding into both if they become more unstable and we keep chugging forward, helping both. Money flow wise I don't see anything coming along to suck cash out of stocks.
Which tells me this is all smokescreen and there's something more fundamental looming that has them both worried, but for the life of me I can't see what that is specifically. We know the usual problems, but there's not indication right now that these are currectly destabilizing anything. I'm still inclined to chalk this to a head fake.
