For all the music fans out there, we are not referring to the hit song Summer of ’69 recorded by Bryan Adams on his 1984 album Reckless. We are talking about the unemployment rate, which just fell to its lowest level since 1969!
The U.S. Department of Labor reported the unemployment rate declined to 3.7% in September, which is better than markets were expecting, and is the best number in nearly 50 years! Total nonfarm payrolls increased by 134,000 which was well short of expectations. However, Hurricane Florence may have negatively impacted the number and the job counts for the prior two months were revised notably higher. After revisions, job gains over the last 3 months have averaged 190,00 per month. Other details of the jobs report show that average hourly earnings rose to $27.24 for September and increased 2.8% over the year. Overall, the labor market is exceptionally strong.
Looking to the week ahead, it’s the start of our favorite season – earnings season! The big banks get things going this week as Citigroup, JPMorgan Chase, and Wells Fargo are scheduled to report results. Overall, for the third quarter of 2018, the earnings growth rate estimate for the S&P 500 is 19.2%, which would mark the third highest earnings growth since the first quarter of 2011 (according to FactSet). As another earnings season kicks off, we have to mention every quarter that earnings are the mother’s milk of stock prices!
As always, please contact us with any questions you may have or if you would like to set up a meeting.
All the best,
Southport Station Financial!