Market Update September 8
By Twickenham Advisors on September 29, 2026
Sources: Twickenham Advisors, Morningstar Direct, Federal Reserve Bank of New York, Federal Reserve Bank of St. Louis, U.S. Department of Treasury, and Ycharts as of September 08, 2026
On Friday morning, the Bureau of Labor Statistics released employment data for the month of August. Nonfarm payroll employment increased by 162,000 jobs, nearly triple the 55,000 economists expected. Additionally, the prior two months were revised higher, wiping away July’s initially reported job loss and making the summer slowdown look less severe than it did a month ago. Participation also rose for the first time in nearly a year while unemployment held at 4.1%.
Although there are some impaired sectors in the economy (e.g. housing), there’s strength elsewhere (e.g. technology capex). With the labor market in a relatively steady state of equilibrium, much attention has shifted to inflation. The Federal Open Market Committee (FOMC) meets next week to weigh in on the need to raise interest rates to curtail inflation. The sources of inflation are varied, emanating from both supply and demand forces affecting different segments of the economy. Since there are so many different contributing causes to inflation, determining whether the economy is growing “too fast” is no simple task. Currently, futures markets are pricing 60% odds of a rate hike next week, and 86% odds of an increase before year-end.
Stepping back from the headlines du jour, the domestic economy has remained resilient. True, interest rate sensitive sectors have languished, as markets have anticipated some central bank tightening. New business formation has been picking up, economic growth remains robust, employment conditions appear stable and there are limited signs of any broad-based credit stress in the U.S. Some consumer spending data suggests consumers are behaving cautiously, but that is to be expected with the increase in fuel prices driven by the geopolitical tensions this year. Wall Street analysts usually reduce earnings estimates for companies during the first two months of a quarter. During July and August, analysts increased earnings per share (EPS) estimates in aggregate for the S&P 500 companies by 1.5% for the 3rd quarter. This is the second straight quarter that the bottom-up EPS estimate has increased during the first two months of the quarter.
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