Michele Schneider | Sep 05, 2021 04:08AM ET
Friday, the Jobs report showed 235,000 new jobs reported for August. This was not good news since the estimate was roughly 500,000 higher.
Ouch!
However, the major indices did not take a large hit and closed roughly flat or a smidge down for the day. So why does the market not seem concerned about the recent jobs report and why is it most likely related to the Fed?
Over and over again the Fed has stated how much they focus on the labor market as a key to the economic health. Currently, they have stated that past positive jobs reports is a reason to begin tapering the bond buying program. So far, their bond-buying program has been a fundamental lifeline for the market and economic recovery throughout the pandemic. Recently, the Fed stated that this “lifeline” could begin to slowly be cut as the economic recovery is strong.
With that said, if jobs growth begins to slow and it continues to do so, it could change the Fed's timeline for reducing bond spending. Because the market knows the Fed is worried about the jobs numbers it could be viewing the poor report as something that potentially will extend support from the Fed. There is even speculation that unemployment benefits could get an extension by the government.
The market isn’t worried as much about the jobs report because it thinks the Fed has its back and will continuing giving support if jobs growth becomes consistently weak. Therefore, we can keep watching our special Fed spending indicator.
The High yield bond ETF—SPDR® Bloomberg Barclays High Yield Bond ETF (NYSE:JNK). JNK continues to hold near highs in price and therefore it shows that investors are speculating that risky debt will continue higher along with the market.
h2 ETF Summary/h2
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.