Read the highlights of this week’s commentary from Helios:
- The ISM Manufacturing Purchasing Managers’ Index (PMI) improved slightly in August, but remains in contractionary territory. Demand-side factors were weak, with new orders and export orders declining at a faster rate. Supply-side factors helped boost the PMI, but firms reported rising input prices, suggesting much of the benefit from improving supply chains has passed.
- The S&P 500 posted its worst week since March 2023, as a disappointing August jobs report renewed concerns about a cooling economy. Nonfarm payrolls rose by 142,000 in August, bringing the three-month average down to its lowest level since mid-2020. Although the unemployment rate for August ticked down from 4.3% to 4.2% on a rounded basis, the actual decrease was a marginal 3 basis points — from 4.25% to 4.22%.
- The Federal Reserve is expected to begin rate cuts at the September 17-18 FOMC meeting. While the size of the cut is still uncertain, Bloomberg Economics forecasts a 25 basis point cut. In prepared remarks on Friday, one Fed Governor stated that risks have shifted more toward employment concerns and that he was open to the idea of a larger rate cut and would support one if necessary.
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