In July, stock markets rose again, but it is mainly due the employment reports that showed a gain in jobs as well as an increase in pay wages.
It may be difficult to believe just how much these to truly have in common, but the truth of the matter is that the Nasdaq increased one percent while the Dow jumped 175 points. The rise in the Nasdaq is the highest it’s been since the summer of 2015.
Of course, all investors were very happy to see the job numbers that are solid, but they also know that this will increase the possibilities of an interest rate gain in September by the Federal Reserve as it shows the economy in the United States is solid while China and Brexit economies are showing slower growth. According to a large cap portfolio manager, Patrick Kaser from Brandywine Global, the jobs reports does not show any type of weakness on the surface.
He went on to say, that is great news for banks that have had to deal with low-interest rates which have been hurting their profits for several years. If the interest rates are raised again by the Federal Reserve once again, banks will start earning money again. With that being said, obtaining a USC's Masters in public administration could also benefit your wages as more banks will need help in the area of finance and other aspects of running their banks that you will learn while achieving your master’s degree.
Many of the huge bank stocks grew as well this past Friday such as Bank of American, Citigroup, JPMorgan Chase, and Wells Fargo. According to the chief economist at Glassdoor a recruitment company expressed that American needs to see a slow and steady market growth which is not only good for banks but for the market in general.
Another good sign of the America economy is that bond yields also grew which is a sign according to investors that the United States economy is getting better and they also agree that the Federal Reserve will more than likely raise the interest rates sometime during the year.
The sad news is that slow growth companies that investors seem to love actually were lower on the Dow on Friday such as Verizon along with two others. Shares in other companies were up which make the Dow show a huge increase which included companies such as Caterpillar, Target, Amazon, Facebook, and Apple.
On the other hand, the chief investment strategist, Michael Arone that works at State Street Global Advisors expressed that investors are betting on the market even though it has been in a lethargic paceare finally showing signs of improvement which means that employment could be on the rise.
There was one negative report, as always, not matter what market you are looking at and that was from chief economist, Tim Hopper, that works at the TIAA Global Asset Management that stated the growth in wages only grew 2.6 percent which is below where it needs to be as well as unemployment was also a small bit higher during the same amount of time.