E TalkMarkets Tuesday Talk: The Green Grass Of August

The COVID-19 news is mixed, as is much of the rest of the news, but the markets are showing continued optimism with the Dow gaining 358 points yesterday to close at 27,791, the S&P 500 up 9 points closing at 3,360 and the Nasdaq hovering at 11,000 but closing down 43 points at 10,968.

Yesterday’s top gainers were largely pharma related, showing continuing sentiment for risk in anything coronavirus-related and real investor zeal for an answer to the pandemic.

Source: The New York Times

The morning futures for New York are currently showing green. Key indexes in Asia were up today and the European markets are also looking green.

Every gardener knows that it’s not good to let the grass get too high. As such, we should be on the lookout for a trim.

TalkMarkets contributor TheoTrade in their article Much Stronger Jobs Report Than Expected reports that stronger than expected employment data for July is a strong signal that the economy is recovering.

1.763 million jobs were created in the U.S. economy in July, beating estimates for 1.675 million. TheoTrade includes a chart from the U.S. Bureau of Labor Statistics showing in which sectors the jobs were created.

TheoTrade notes that wages also rose higher than expected and concludes, "This labor report was very strong. It beat estimates by a lot. Some investors were already bullish on the economy because COVID-19 cases are falling and a stimulus should be coming. With this great report, they are even more bullish because it means we are closer to single-digit unemployment.”

Chatter continues about wither the US dollar, but this morning TalkMarkets contributor Yohay Elam in King Dollar’s Comeback Seems Unstoppable, And For Good Reasons writes that last week’s strong jobs report, declining COVID-19 case over the weekend in the U.S., and continued U.S.-Sino tensions are all reasons that support the dollar’s renewed strength.

Elam cites a worrisome rise in COVID-19 infection rates in Germany and an anticipated minor decline in business sentiment to be reported in the ZEW Economic Sentiment index today. He cites these concerns as reason to believe that “Overall, the wind is blowing strongly in favor of the dollar and moderately against the euro.”

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William K. 1 month ago Member's comment

Quite interesting, but I am not sure about investing a whole lot in foreign markets today. Things are just a bit too uncertain at present.