Gold prices just lower; monthly gains on track
Investing.com -- Friday’s weaker-than-expected U.S. jobs report rattled markets, but the Sevens Report says investors shouldn’t overreact, yet.
“The jobs report was a major disappointment, but job adds are still positive, so it’s not signaling any sort of recession or slowdown,” Sevens wrote Monday.
While the labor market data “was a jolt,” they cautioned that the report is “the most ‘inaccurate’” of all economic indicators, often subject to major revisions and seasonal distortions, especially in late summer.
Sevens also noted that other labor market metrics, such as jobless claims and the JOLTS survey, remain stable. “No other labor market indicators are flashing a warning sign,” the report said.
As for Friday’s tariff announcements, which coincided with the jobs data, Sevens called them “largely in line with expectations.”
While Canada and Switzerland saw slightly higher rates, “negotiations are ongoing,” and the drop in markets was more a case of sentiment shifting than any meaningful policy surprise.
“The S&P 500 gave zero room for disappointment,” Sevens noted, adding that the selloff “reminded the markets that it is possible that tariffs and policy volatility damage economic growth.”
Looking ahead, Tuesday’s ISM Services PMI will be critical. If it falls below 50, “look for economic anxiety to rise and stocks to fall further,” stated Sevens. They added that a stable reading above 50 would help calm markets.
Friday’s trading saw a shift back to “Recession Paranoia,” with defensive sectors like utilities and healthcare outperforming.
While Sevens is not advising overweighting those areas yet, they suggest that “if you’re very light defensives, you may want to be ready to boost them if data is soft.”