Swedish bank Nordea notes that in August, the S&P 500 index fell by 1.8%, and the Nasdaq dropped by 2.1%. While not a significant plunge, it was enough to make August a month of weak performance for U.S. stocks.
September traditionally tends to be a seasonally weak month for the stock market, and its early performance may hinge on this week’s most critical data – the U.S. nonfarm payrolls report. Analysts are expecting an addition of 170,000 jobs in nonfarm employment.
The ongoing tour of renowned American singer Taylor Swift is considered an upside risk to the labor market, while the ongoing Hollywood screenwriters’ strike presents a downside risk.
Investors are more concerned about a strong surprise in nonfarm job gains, which could tilt the Federal Reserve toward another interest rate hike, rather than fretting over weaker job additions.
In fact, if nonfarm employment growth does slow significantly to 100,000 jobs or lower, it could potentially bode well for the stock market. However, there are not many signs pointing to such a scenario.
