The jobs report was a little light on Friday, but it didn’t keep the major indices from reporting a second straight week of gains.
The Dow advanced 0.26% (or about 69 points) today to 26,797.45, bringing its weekly advance to 1.5%.
The S&P rose 0.09% to 2978.71, while the NASDAQ slipped 0.17% (or nearly 14 points) to 8103.07. Both of these indices improved 1.8% for the week.
Stocks came off their highs of the session, but were still solidly in the green to start the historically-difficult month of September.
Last week, the indices snapped a four-week losing streak with the Dow soaring 3% and the other major indices climbing just under that mark.
The economy added 130,000 jobs last month, according to the Government Employment Situation report. That was about 20,000 jobs lighter than expectations. However, a deeper read showed that the unemployment rate remained steady at 3.7% for the third straight month, while wages and participation rates rose.
One guy who really liked the report was Fed Chair Jerome Powell, who used it as further proof of a strong economy during an event in Zurich today.
He also reiterated that the Fed will do what it takes to keep the economy moving in the right direction. And perhaps most importantly, Mr. Powell said that he doesn’t see a recession, though the trade conflict is having an impact.
As far as investors are concerned, a 'good enough' jobs report along with harmless comments from the Chair have them feeling pretty good that a rate cut is coming later this month.
And looming over everything, of course, are hopes that the trade conflict between the U.S. and China is thawing enough to allow some progress on a deal.
The biggest news of the week came yesterday when both sides agreed to high-level meetings early next month.
So we finally got a string of positive headlines in the past few days after what felt like a snakebitten month of August. If the good times keep coming, then we may be in store for a ‘three-peat’ next week!
Today's Portfolio Highlights:
Surprise Trader: The retail space continues to pay off for this portfolio as Zumiez (ZUMZ) continued its excellent history of outperforming the Zacks Consensus Estimate. After the bell yesterday, the specialty apparel and footwear retailer beat our earnings expectation by 89.4%. That makes six straight quarters with a positive surprise. Net sales also were better than expected by advancing 4.3% to $228.4 million, while same-store sales were positive for a 12th straight quarter. ZUMZ raised its fiscal 2019 outlook after these strong results. Dave added ZUMZ on Tuesday and today the stock was up 11.2%, which made it the best performer among all ZU names.
Value Investor: "The global consumer is holding up well. That could all change if the slowdown deepens, however. In the US, the job market is still holding up and that's key for the continued spending by the American consumer.
"If they believe they will keep their job, they will spend money.
"The August BLS report, while not great, continued the record expansion with 130,000 jobs created. Unemployment remained stable at 3.7%. It was the type of report that gives the Fed cover if they cut rates, or cover if they don't (although the overwhelming sentiment currently is that there will be at least a 25 basis point cut later this month.)" -- Tracey Ryniec
Have a Great Weekend!
Jim Giaquinto
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