Welcome to illuminati Silver, we tell you the truth about silver.
Today is Sunday 6th September 2015 and we are going to cover Friday’s US Labor Dept
figures and their implication for interest rates in the United States.
The US added 173,000 jobs in August, the Department of Labor said on Friday, in the last unemployment
report before September's interest rate decision by the Federal Reserve.
That was below the 217,000 predicted by analysts, although the Labor Department said that figures
for August tend to be revised higher subsequently.
The unemployment rate fell to 5.1% - down from the July figure of 5.3%.
The rate is the lowest for over 7 years, in fact since April 2008.
Wall Street headed lower following the numbers.
U.S. stocks closed more than 1 percent lower on Friday ahead of a long weekend as uncertainty
about the timing of a rate hike and Chinese economic growth continued to weigh.
European stock markets, which had been trading lower before the data was released, extended
their losses; with the FTSE 100 in London closing down by 2.44% and indexes in Paris
and Frankfurt dropping by 2.81% and 2.71% respectively.
Mainland Chinese stocks were closed for a second straight day for a public holiday.
The Nikkei closed down 2.15 percent.
The Hang Seng declined 0.4 percent.
There were upward revisions to the number of jobs created in the previous two months
however, which added another 44,000 jobs.
The revised figure for July was 245,000 jobs.
The weaker-than-expected August number could make Fed officials think twice about increasing
rates when they meet on 16-17 September.
On Twitter, BBC economics editor Robert Peston said it was "inconceivable" that the Fed would
now raise rates this month given the jobs data and slowdown in emerging markets such
as China.
Paul Ashworth, chief US economist at Capital Economics, said the report was "fairly mixed
and can be used to make a case for or against a rate hike", adding: "The September meeting
is a 50-50 toss-up."
Rob Carnell at ING Bank said: "We don't think it is sufficiently strong enough for the Fed
to proceed with a September rate hike without markets worrying that the data is not good
enough to support it."
Chris Williamson, chief economist at Markit, said: "The most likely scenario is one where
the Fed waits a little longer in the light of recent economic and financial market instability,
instead merely testing financial market reactions with rhetoric that a rate rise is increasingly
imminent."
Then there is all the recent global financial market volatility.
A rate rise this month is far from certain.
One of the officials who will help make that decision said earlier on Friday that the US
labour market had recovered sufficiently to warrant raising rates soon.
Richmond Fed President Jeffrey Lacker, who had called for a rate increase in June, said
the US economy no longer needed rates to be so low.
He said after the numbers were released that he would going into the rate meeting "with
an open mind".
"On balance I think the report was a good one, and if we weren't in the middle of market
volatility and global turmoil we'd be set for a hike in September," said Liz Ann Sonders,
chief investment strategist at Charles Schwab.
Despite the relatively high dollar, The US trade deficit with the rest of the world fell
to a five-month low in July, official figures show.
The US Commerce Department said that it declined 7.4% to $41.9bn, compared with $45.2bn in
June.
Now, the trade deficit represents the difference between the value of what the US exports to
the rest of the world and what it imports.
Exports rose 0.4% to $188.bn, helped by stronger global sales of US cars.
Imports fell 1.1% to $230.4bn.
Sal Guatieri, senior economist at BMO Capital Markets, forecast trade would continue to
drag on US economic growth over the next year.
He added a stronger dollar would harm exports and boost demand for imports by making foreign
goods cheaper for US consumers.
A sharp slowdown in China in recent market has led to volatile financial markets in recent
months, as investors have become concerned that China's slowdown could have an adverse
impact on global growth.
The International Monetary Fund (IMF) said on Wednesday that China's slowdown, volatile
financial markets and falling raw material prices could lead to "a much weaker outlook'"
for global growth.
So all of the experts are still uncertain about whether an interest rate rise will or
will not occur.
“Markets need to calm down for the Federal Reserve to pull the trigger on the first interest
rate hike in more than nine years”, Bank of America Merrill Lynch's co-head of global
economics research said on Friday.
"If they met today, there's no way the Fed would hike interest rates.
There's too much volatility in the markets and there's no rush here.
It's not like inflation's running out of control and they have to manage that," Ethan Harris
told CNBC's "Squawk Box."
The decision to start normalizing monetary policy at one of three remaining Federal Open
Market Committee meetings this year is a tactical issue for the Fed, Harris said.
Our view is a simple but tough one.
No-one knows what is going to happen at the FED meeting in 10 days’ time.
However, if they did raise rates by 0.25% and said they would then look at the data
for the following few months before considering another rise, it would, in our opinion, at
least stabilise markets as it will have removed the uncertainty.
Also, it gives the FED credibility that it is willing to make tough decisions.
It will maintain the strength of the dollar, and will, to some extent reduce the need for
other currencies to devalue further.
Yes the stock markets may go down another 1000 – 2000 points – which is actually
necessary to take the heat out of the market.
Whether this will happen of course, is anyone’s guess.
We hope you have found this video useful and informative.
If so, please give it a thumb up, comment and if you haven’t already done so, please
subscribe.
Also it would be helpful if you could share this on twitter and follow us @illuminatisilv1.
Disclaimer: Silver Illuminati owners come from a background
of Banking, International Wealth Management and Economics.
Having now retired from these worlds we are not qualified to give investment advice.
Therefore, this and other productions must not be deemed to be giving such advice and
merely represent the personal views of its owners.