With September and the 3rd quarter behind us, we enter the 4th quarter with a lot of positive momentum in the markets and in the US economy. The September jobs number came out this morning and was surprisingly strong. We saw 254,000 jobs created last month versus an expected 150,000 and the unemployment rate fell from 4.2% to 4.1%.
https://www.cnbc.com/2024/10/04/september-2024-us-jobs-report.html
Needless to say, the odds of a recession in the near-term are very low.
However, the same cannot be said for China. Their economy remains stuck in a recession as they struggle with a deflation problem.
Their recession was well-timed for the US economy as it made our battle against inflation a lot easier. If the Chinese economy were in a growth phase this year, we would have seen higher demand globally for raw materials, keeping prices higher for everyone.
The Chinese government has made a few moderate attempts at stimulus, but last week they announced a substantial stimulus package that pushed Chinese stocks up over 25%.
While the stimulus package was obviously well-received by investors, economists emphasized it will take more than a stock market rally to reinvigorate the Chinese economy.
https://www.economist.com/leaders/2024/10/03/dont-celebrate-chinas-stimulus-just-yet
The effects of the stimulus rippled through the global markets. American investors with diversified portfolios have seen their emerging markets stock investments rise as a result.
In the past 2 weeks, emerging market stocks (pink) has risen 6% as US stock indices (red, blue, and green) have remained flat.
Have a great weekend.
Jack C. Harmon II, CFP®, CIMA
Principal, Harmon Financial Advisors
Registered Principal, Raymond James Financial Services
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