WSJ What’s News - Stock Markets Fall After U.S. Jobs Report Leaves Investors Guessing

Episode Date: September 6, 2024

P.M. Edition for Sept. 6. The U.S. economy added 142,000 jobs. Wall Street Journal reporter David Uberti says this doesn’t resolve how much the Fed might cut interest rates at its next meeting. And the U.S. says Iran has sent ballistic missiles to Russia despite stern warnings from the West not to. Plus, Donald Trump’s sentencing in his hush money trial has been postponed until after the election. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Ecolab Water for Climate. Less water, more growth. Results will vary. Learn more at Ecolab.com slash EWC. Ecolab Water for Climate. Transforming the way the world thinks about water. The U.S. says Iran has been sending ballistic missiles to Russia. And U.S. stocks post steep weekly losses after a mixed jobs report. This is one of the most hotly anticipated jobs reports in recent memory, and people were really looking for direction from this data. And truth be told, they didn't really get any. Plus, abortion is a big issue in Arizona.

How will that affect the presidential election? It's Friday, September 6th. I'm Tracy Hunt for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. US and European officials said today that Iran has sent short-range ballistic missiles to Russia despite stern warnings not to do so. The missiles give Moscow another potent military tool in its war against Ukraine. Russia has stepped up its missile attacks on Ukrainian cities and infrastructure, killing dozens of civilians in recent days.

The National Security Council hasn't responded to an immediate request for comment. There was also no immediate comment from the Iranian mission to the United Nations in New York or the Russian embassy in Washington. Today's job report has been the most anticipated jobs report in a really long time. It showed that job growth in the U.S. rebounded in August with 142,000 jobs added to the economy. Last month's unemployment rate also takes it lower to 4.2%. Now we wait and see what the Federal Reserve will do with these numbers as it contemplates a series of rate cuts when it meets later this month.

Wall Street Journal reporter David Uberti is here with us to explain what this all means. So David, what can we make of this data? Well, as you said, this is one of the most hotly anticipated jobs reports in recent memory, and people were really looking for direction from this data. And truth be told, they didn't really get any. Like you said, jobs went up from last month, but at the same time, job reports from previous months were revised lower.

Also, simultaneously, unemployment went lower than previous months. So we have this weird sort of set of factors that are complicating the outlook for the economy at this moment. And the long and short of it is that people are unclear as to how the Fed is going to move going forward. There's two possibilities on the horizon at the Fed's next meeting. There's a quarter point rate cut and a half point rate cut. And this jobs report didn't provide a total answer to what they should be doing going forward. So I think it is to be seen like what happens next and people will be

looking to an inflation report next week for additional data. Lylea Lambert So New York Federal Reserve President John Williams and Federal Reserve Governor Christopher Waller, they both spoke after the report was out. Did they give any clear indication of the Fed's thinking? They really didn't, truth be told. Historically, the Fed has approached these situations by taking a quarter point cut. They tend to be a pretty conservative institution in that regard. They don't want to rock the boat too much if they potentially overcut.

They could jolt markets in a way that would create fear throughout the financial system, which is certainly something they don't intend to do. So if you look at futures markets where people essentially bet on the outlook for interest rates, more investors tend to put a higher probability on the Fed taking a more gradual approach to interest rates going forward. But the two Fed officials who spoke today didn't really give any clear indication as to how they're going to approach this going forward. Lylea Salamon, Ph.D.

The markets went down after this jobs report. What explains Wall Street's reaction? Michael Sink, Ph.D. Well, the markets always look for certainty and clarity. And as I said at the outset, they got very little direction from this. Separately, there are some other things happening at the market at the same time. As you and I have previously spoken about, there is this sort of mounting skepticism about the artificial intelligence fueledfueled mania

that sort of swept through Wall Street. So you have this weird combination of investors who are questioning AI. They're maybe trying to secure some profits from some of their stock gains in recent months. And then also, they are very uncertain about the economic outlook ahead. So they could potentially be pulling back a bit

and waiting until they get that direction, that signal from the Fed at their next meeting of what the rate cut path might look like going forward. David Uberti is a Wall Street Journal reporter. Thank you, David. Thanks for having me. As we mentioned, stock indexes posted steep weekly losses after weaker than expected data reignited fears

about the health of the U.S. economy. The tech-heavy Nasdaq tumbled 5.8% on the week, its worst performance since January 2022. The S&P 500 fell 4.2% and the Dow was 2.9% lower. Many of the high-flying artificial intelligence-related stocks that have powered stock indexes higher this year were among the hardest hit this week. Nvidia dropped 14% erasing a staggering $406 billion of market capitalization. It was the largest weekly market value loss for a single company ever,

according to Dow Jones market data. Coming up, Arizona and abortion. The Wall Street Journal's Jimmy Villekind talks about the first episode of his Chasing the Vote series starting this Sunday. That's after the break. This episode is brought to you by

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Get up to $1,800 in value when you apply for the CIBC Aventura Visa for Business at cibc.com slash Aventura Business. Terms and conditions apply. The upcoming presidential election is unlike any that Americans have seen in generations. We have a former president running for the office after being convicted in a hush money trial and surviving an assassination attempt, and the current president dropping out of the race and catapulting his VP to the top of the ticket. To say voters have a tough job ahead of them is putting it lightly.

Wall Street Journal political reporter Jimmy Vielkind traveled to some of these key states that will decide the election, asking voters what they think of the main arguments put forward by Republicans and Democrats for our new multi-part series, Chasing the Vote. And Jimmy is here with us. Hi, Jimmy. Hi, Tracy. So what was the big question you had going into this project? Well, this is a similar project to Chasing the Base, which listeners might remember focused

on the big currents influencing the GOP nominating process. And what I really wanted to do was take some of the big questions I had about the race and put a who and a why behind some of the answers. So in Arizona, we decided that we would focus on this question of how the debate over abortion might impact a key swing state. Arizona is a special case because abortion will literally be on the ballot. There is a constitutional amendment about reproductive rights that voters will face as the same time as they pick their candidate for the presidency. And you spoke to many voters. Let's hear some of them. I would say abortion is up there in the woman's right to choose is a top factor among other

things. I don't think it's in the government's business or anyone's really what another woman does with her body. I do believe in certain abortions. So you either go one way or another way, probably end up going with no abortions. People here are counting on the abortion issue to drive people to the polls. These are some strong views. How do you think this like ballot initiative and other issues will play into turnout for Democrats and Republicans? It's very, very complicated. And

that was one of my biggest takeaways from Arizona. The debate about abortion has been raging in American politics for decades. But it of course, it reached a new fever pitch in 2022 when the Supreme Court struck down the Roe v Wade decision, which provided a national floor for abortion rights. In Arizona, what we found is that the Democrats' argument that they are the bulwark against abortion restrictions probably is a very potent motivator for their base and it might be their

best arguments. But it had some limits among swing voters. I talked to some people who were independents who said it might be a nudge, but other people said that having a referendum on the ballot would let them split their tickets. In other words, if they supported abortion rights, they could vote for the amendment, but then they could vote for any presidential candidate they chose. So I think it's going to be very complicated, but it's certainly for many people is providing as big a reason to get to the polls as perhaps the presidential candidates themselves.

Jimmy Villekind is a Wall Street Journal political reporter and the host of the new podcast, Chasing the Vote. Coming up this Sunday on the What's News feed. Donald Trump's sentencing in his hush money trial will have to wait till after the presidential election. That's a decision from a New York judge today. The sentencing had been scheduled for September 18th, but the judge said he'd postpone it to November 26th to avoid any accusations of election interference. The delay means Trump, the Republican presidential nominee, has staved off a public

hearing that would have put his felony conviction back in the spotlight less than two months before voters head to the polls. In Boeing's beleaguered Starliner is returning to Earth without its crew. NASA says Starliner is scheduled to on-dock from the International Space Station tonight and will arrive in New Mexico after midnight Eastern time tomorrow. The Starliner transported two NASA astronauts up to the space station back in June, but issues with the spacecraft made it so it could not return them a week later as originally

scheduled. A SpaceX craft will pick up the astronauts in February. And finally, if you had your eyes on American fashion in the 80s and 90s, you knew all about J. Crew's catalog. The elaborate photoshoots epitomized wealthy Americana. Now the company is bringing back the print catalog. The first one shipped just this week. Wall Street Journal reporter Javi Lieber says the move comes as J. Crew hopes to build on

its sales momentum. J.Crew is in a bit of a renaissance at the moment. They were one of the first retailers to file for bankruptcy during the pandemic. Four years later, they have really seen a big turnaround. The return of millennial and older customers who were the original shoppers at J.Crew. And then they're also seeing younger shoppers more than ever. And they feel like the return of the catalog is a crucial marketing moment for them. Anyone who grew up in the 90s for sure in the late 80s remembers J.Crew catalogs being

the epicenter of American fashion and they want to bring that back again. This is a revival of nostalgia essentially. So there still are stylized photo shoots and models wearing products but it's a lot of more editorial content and there's no pricing. You have to scan a QR code and that will take you to an app that will allow you to shop and order. So it feels old school but it's very much not the old J.Crew catalog. Another difference? The company used to make 13 catalogs a year. Now it will only make three.

And that's What's News for this week. Tomorrow, you can look out for our weekly markets wrap up, What's News in Markets. Then on Sunday, as we discussed earlier, we'll have the first episode of our multi-part series Chasing the Vote with Jimmy Vealkind reporting from Arizona. The first stop of his travels to the key states

that will decide the presidential election. And we'll be back Monday morning with our regular show. Today's show was produced by Anthony Bansi and Pierre Bienanme with supervising producer Michael Cosmitis. Michael Laval wrote our theme music. Aisha Al-Muslim is our development producer. Scott Salloway and Chris Zinsley are our deputy editors. And Fulana Patterson is the Wall Street Journal's head of news audio. I'm Tracy Hunt, thanks for listening.