The jobs report was a blowout. Economists expected 55,000 new jobs, and instead we got 162,000. That’s great news, right? Maybe not for the stock market. With inflation still high, oil prices surging and the economy showing strength, the Fed may now have even more reason to raise interest rates. In this week’s Market Alert, we explain why higher rates could mean a market dip and why we believe having a defense built into your retirement plan is so important.

• Federal Reserve Chairman Warsh gave his speech at Jackson Hole, and basically he said inflation is still too high and the Fed may need to raise interest rates in the coming months to bring it down. 

• His key line was that the summer’s inflation readings “do not tell me that underlying inflation has meaningfully improved.” 

• He also recommitted to the Fed’s 2% inflation target as “firm and fixed.” 

• Before his speech, the odds of a Fed rate hike this year were 35%. After his speech, they jumped to 66%. 

• Major banks have moved up their forecasts, and some are even saying we could see two rate increases this year. 

• That means a lot to us because interest rates impact the cost of car loans, mortgages and credit cards. 

• If money costs more for consumers to spend, guess what? They’re going to spend less. That slows the economy down, slows profits down and slows our investments down. 

• Warsh also said people should not be looking to the Fed for their next trade. In other words, you’re on your own. Do your own homework. 

• The Fed isn’t going to tell everybody what it’s going to do anymore, and that could create more volatility in the market. 

• The second thing is the war in Iran. The war has reignited, and oil prices surged more than 10% this week. 

• West Texas crude hit $93 a barrel and Brent went to $97 a barrel. Higher oil prices mean higher gas and higher inflation tomorrow. That’s a bad thing. 

• The 10-year Treasury yield is now almost at 5%, and many economists are saying that if it gets above 5%, it could cause a contraction in the economy. 

• So we have rising oil stoking inflation fears and a hawkish Fed that wants to raise interest rates. Both could push interest rates higher. 

• Higher interest rates push bond prices down, which is why you may have noticed the bond side of your portfolio hasn’t been doing as well as the stock side. 

• That’s just the nature of diversification. You’re going to have some parts that do well while others don’t, and hopefully the whole thing balances itself out. 

• The PCE, which is the Fed’s favorite gauge of inflation, came in at 3.7%. Warsh says they’re committed to 2%, so how are they going to get there? Probably by raising interest rates. 

• After all that, you’d think things are bad, right? Wrong. 

• The jobs numbers came in, and they were a blowout. 

• Economists were expecting 55,000 jobs. Instead, we got 162,000, almost three times what they were expecting. 

• That’s great news. Jobs abound. Unemployment stayed at 4.1%, and wages rose 3%. 

• They also revised the last two months’ jobs numbers upward. We went from thinking we were losing jobs to suddenly we’re making jobs. 

• So when you line it all up, the Fed has two mandates: full employment and getting inflation under control. 

• Right now, the economy is showing signs of being good even though it’s slowing down, but inflation is still high. 

• Therefore, the Fed can set aside the economy and go after inflation, which again points to higher interest rates. 

• The stock market unfortunately probably will not like that. 

• Expect the market to go down in light of all of this over the next few weeks. Next week, we’ll get the actual inflation number and see how that comes in. 

• Right now, it looks like we’re going to see higher interest rates, and therefore the market may go down somewhat between now and the end of the year. 

• Does that mean it will go down the whole time? No. Probably this year we’ll be higher than where we are now, but in the interim, we might see a little dip. 

• All of this is by way of saying: don’t worry about it. Let us do the worrying. Let me get the gray hair for you. 

• With our Invest and Protect process, if something goes wrong and suddenly the market takes a tailspin, you know that we will take care of business for you. 

• So enjoy. Have your Second Childhood Without Parental Supervision. 

• Overall, kind of good news with lots of jobs, bad news with inflation still high and the war. Overall, not too bad. 

Transcript:

Hello everyone, and welcome back to our weekly market alert video for today, which is Friday, September 4 Alex. He said it was a fifth. I’m like, “No, it’s not.” Friday, September 4, 2026. I’m so glad you are with us. I hope that this video finds you healthy, wealthy and wise. And for all of you SQUIPRs out there in SQUIPR Nation, I hope you are out there squippering your little tails off.

And don’t worry, we have clean-up crews. They will pick up all the SCWPER tails. And for those of you who don’t know what a SCWPER is, it is a client of ours who has retired and is now enjoying their second childhood without parental supervision. And SCWPER S is the acronym for that. So, we have a lot to talk about this week.

So first of all, we have the speech that Federal Reserve Chairman, uh, Warsh gave at Jackson Hole. And we told you this was gonna be a very important speech, and sure enough, it was. Secondly, we’re gonna talk about the fact that the war has reignited in Iran and oil prices spiked by 10%, inflation’s back up again.

Oh my gosh, what does that mean? And then to make it all kind of wrap together and really make it complicated, we had the jobs report which was a blowout. 162… Hundred, easy for me to say, 162,000 created instead of the 55,000 expected. And not only that, but they went and revised the jobs from before. So, we have all of that.

We’re gonna wrap it all up for you into one nice big bow. So, before we get going, um, you know, I wanna update you guys. As you know, um, I’m a perennial dog guy, but my wife has, uh, brought into our family against my protestations a, uh, two, uh, Maine Coons. Now if you don’t know what a Maine Coon is, I dare you to go Google it, okay?

Google Maine Coon. M-A-I-N-E, Coon, C-O-O-N images on Google and you will see these cats, they get to be this big. And we have two of them, and one of them is called Ziggy, and Ziggy is an eating machine, okay? He eats all the time. It’s like we can’t keep the thing filled. And something happened the other day that, uh, you know, I was…

I’m a good husband even though I’m not a cat guy, but I’m getting there. You know, I cleaned the litter box. Uh, you know, I participate in, in the duties on that. And the other day, there were some logs in there that were so big that I actually asked my wife, I said, “Are you like pooping in the cat litter box now?”

And she’s like, “No.” I’m like, “Those are not cat logs,” okay? Those are human logs. I mean, oh my gosh. It’s like … Anyway Am I gonna get in trouble for that one, Alex? You might need to- You think we’re gonna get some, we’re gonna get some, uh, some emails on that one? I’m sorry to bring- I, I don’t know if we’ll get emails.

I might, I think you might get a talking to at home. Yeah, you’re right. I’ll be in trouble with my wife. She’s like, “Do not tell that story.” So anyway, yeah. So I’ll keep you posted on, on the log, uh, stories as, as we go, ’cause I’m sure you’re all, you know, dying to know more. Anyway, so let’s talk about, uh, Federal Reserve Chairman, uh, uh, Warsh.

Uh, now, he gave a speech In Jackson Hole and basically two weeks ago, a- and two weeks ago I told you you needed to listen, and he did. So h- he said inflation is still too high and the Fed may need to raise interest rates in the coming months to bring it down. So here’s what he said. His key line, yes, this summer’s inflation readings were better but, in his words, “They do not tell me that underlying inflation has meaningfully improved.”

And then he recommitted to the Fed’s 2% inflation target as, quote unquote, “firm and fixed”. Okay? So he is committed. Now, before the speech, the odds of a Fed rate hike, raising interest rates this year, was 35%. After his speech, it jumped to 66%. Okay, he basically said, “Kids, we want to raise interest rates.” Now, major banks have moved up their forecast and i- in fact, some of them are even saying we’re gonna see three rate…

or, I’m sorry, two rate increases this year. Two of ’em. So this means a lot to us because that is the cost of car loans, that’s the cost of mortgages, that’s the cost to the consumer on credit cards. That impacts your consumer’s purchasing power, and we know that they’re 70% of the economy. So if they ha- If it costs, if money costs more for them to spend, guess what?

They’re gonna spend less. That slows the economy down, slows profits down, slows our investments down. Okay, now one thing that he did not do, which he said he was not going to do, he said, and I love this line, that people should not be looking to the fed for their next trade. In other words, you’re on your own.

Do your own homework. We’re not telling you what we’re gonna do anymore. You guys are gonna have to figure it out all by yourselves. Now, what does that do? It creates more volatility. Because before, the feds said, “We’re gonna do this. Everybody get ready,” so there was one trade. Now what’s happening is everybody has their own opinion, and so there’s a million different trades happening.

Chairman Warsh thinks that’s a good thing. The market will be more volatile because of it. So ,that’s the first thing. The second thing is the, uh, war in, uh, in Iran. Now, if you guys have been paying attention, you know that, uh, President Trump just started bombing Iran all over again, and then Iran started bombing Kuwait, and Kuwait is now gonna bomb Iran.

Is there a s-… You remember the Duran Duran song? Wasn’t it ‚ô™ Bomb, bomb, bomb, bomb, bomber Andy ‚ô™? . So in the process, oil prices have surged more than 10% this week. West g- Uh, West Texas crude is at $93 a barrel and Brent went to $97 a barrel. So higher oil prices means higher gas and higher inflation tomorrow That’s a bad thing, okay?

So the war is not helping. And here’s the part we talked about last week that’s super important and that is that the Treasury yield, the 10-year treasury which is one of the most important indicators, is now up almost at 5%. And many, many economists –and of course you know what I think of them but be that as it may– they’re saying that if the, if, if that rate gets up above 5%, it’ll cause a contraction in the economy.

So we have rois- rising oil s-, uh, uh, uh, that’s, that is stoking inflation fears, we have a hawkish Fed meaning they want to raise interest rates and both are gonna push interest rates up . And what that does is it pushes bond prices down because they have an inverse relationship to each other. So, you know, you may have noticed if you’ve looked in your portfolio that the bond side of things has not been doing as well as the stock side.

And, you know, that’s just the nature of diversification. You’re going to have some parts that do well while others don’t and hopefully the whole… The, the thing balances itself out. And the other thing that, uh, did come in that is not so good is the PCE, the p- the, uh, which is the, uh, uh, favorite gauge that the Fed uses to g- to look at inflation.

It came in at 3.7% and worse said we are committed to 2%. Again, how are they gonna do that? Probably they’re gonna raise interest rates. So all of that comes all together and you’d think, “Okay,” because of all of that that things are bad, right? Wrong The jobs numbers came in and they were a blowout. 162,000 jobs, three times what the f- again, those economists were expecting.

They were looking for 55,000 jobs. Instead, 162,000. That’s great news, right? Fantastic. Jobs abound. The inflation rate, 4.1, stayed the same. Wages rose 3%. That’s good news. So here’s the kicker. They also revised the last two months’ jobs numbers upward when they were losses. So we went from thinking we’re losing jobs to suddenly we’re making jobs.

Again, the government drives me crazy with how they report things. They tell you it’s one thing. Two months later, they change it. So anyway, you line it all up, and what this all means is that the Fed is now… They have two mandates, right? They want full employment, and they want inflation to be under control.

The economy needs to be good. So right now, the economy is showing signs of being good even though it’s slowing down, but inflation is still high. Therefore, they can set aside the economy, and they can go after inflation which, again, puts it at higher interest rates, and the stock market unfortunately probably will not like that.

So expect the market to go down in light of all of this over the next, uh, few weeks. Uh, next week’s the big number we’ll be reporting to you, which is the actual inflation number, th- and see how that comes in. But basically, right now it looks like we’re gonna see higher interest rates, and therefore, the market may go down somewhat here between now and the end of the year.

Does it mean it will go down the whole time? No. Probably this year we’ll be higher than where we are now, but in the interim, we might see a little, a little dip, okay? So all of this by way of saying don’t worry about it, okay? Let us do the worrying. Let me get the gray hair for you, okay? We don’t want you to get any gray hair.

In fact, we want your hair to stay the same. We don’t want you to lose any hair, and we don’t want your hair to go white, okay? Keep it, keep it, uh, on the darkish gray side, okay, so you look distinguished. Anyway, um, . So with our investment protect, if something is to go wrong, if suddenly the market takes a tailspin, you know that we will take care of business for you, so don’t worry about it.

Enjoy. Have your second childhood without parental supervision. So before we go I wanted to re-, uh, reinvite you. We have our, uh, third Thursday webinar series coming up September 17, okay, on estate planning. So all of you who wanna know, uh, the best ways to leave stuff to your greedy, unwashed, undeserving heirs, you need to, uh, sign up for the webinar.

Uh, there’s an invitation, uh, with this email that came to you. Uh, sign up for it. I think you’ll benefit from it. If you have trouble with it just let us know. We’ll help you get signed up. So that’s our weekly market alert for this week, so kind of a good news, lots of jobs, bad news, inflation’s still high, war.

Eh, overall, not too bad. So thank you for watching, and we’ll talk soon

 

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