Stocks Closed Lower On Friday And For The Week, Making It 3 Weeks In A Row  Image: Bigstock Stocks closed lower on Friday and for the week, making it three down weeks in a row. Stocks started out strong, gaining more than 1% across the board before erasing those gains (and then some), in the afternoon.
Friday's Employment Situation report for August showed another month of robust job gains with 315,000 new jobs (308K in the private sector and 7K in the public), vs. the consensus for 293,000 (280K private and 13K public). The unemployment rate ticked up from 3.5% to 3.7%. But so did the participation rate, going from 62.1% to 62.4%. Average hourly earnings were up 0.3% m/m, which was just shy of views for 0.4%. On a y/y basis, it was up 5.2%, same as last month, but just under estimates for 5.3%. As usual, there were adjustments made to the previous two months of reports. July was revised lower by -2,000 jobs to 526K from 528K. And June was revised lower by -105,000 to 293K from 398K. But, all in all, it was a solid report. And total nonfarm employment is now 240K jobs higher than its pre-pandemic level in February 2020. The industries with the biggest job gains last month came from the following: Professional and Business Services added 68,000 new jobs; Health Care gained 48,000; Retail Trade picked up 44,000; jobs in Financial Activities rose by 17,000; Wholesale Trade increased by 15,000; and Mining was up 6,000. In other news, Motor Vehicle Sales came in at 13.2 million units (annualized) vs. last month's 13.3M and views for 13.6M. And Factory Orders slipped -1.0% m/m vs. last month's downwardly revised 1.8% and the consensus for 0.2%. The market also tried to digest reports that the G7 agreed to cap the price of Russian oil. The details have yet to be worked out. And it won't go into effect until December 5th (which also happens to be the same day that a European Union ban on Russian oil begins). The Group of Seven consists of the U.S., the U.K., Canada, France, Germany, Italy and Japan. A Russian spokesperson, in response to the news, said "companies that impose a price cap will not be among the recipients of Russian oil." In spite of all of the sanctions imposed on Russia to inflict economic pain on their oil revenue, Russia is actually making more money on oil sales now than before they invaded Ukraine. It will be interesting to see how this cap works and if it has the intended consequences. But oil trades on a global market. So I wouldn't get too optimistic over the effectiveness of this announcement at the moment. But I will wait for the details. Crude oil was up 64 cents or 0.74% on Friday at $87.25. Today we'll get another look at the economy with the ISM Services Index, and another look at inflation with the Consumer Price Index. At the moment, stocks are still up from their June lows. But the last 3 weeks cut those gains by more than half. The Dow is up 4.65% from their lows, the S&P is up 7.02%, and the Nasdaq is up 9.25%. But that also means the indexes are down from their all-time highs with the Dow down -14.9%, the S&P down -18.2%, and the Nasdaq down by -27.6%. Stocks will once again try and consolidate recent price action and try and stage a rally. We will see if that succeeds this week. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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