Latest / Markets with Megan: A Quick Financial Markets Update / Service Sector Warning: Prices Are Back | S3 E164 | 09-03-26

Transcript

Service Sector Warning: Prices Are Back | S3 E164 | 09-03-26 · Markets with Megan: A Quick Financial Markets Update

• 0:01
  Megan Horneman: The service sector got a little boost in the month of August.
• 0:04
  Megan Horneman: It is Thursday, September the 3rd, and this is Markets with Megan.
• 0:07
  Megan Horneman: If you like this podcast, you can subscribe, hit the alarm bell, share it with your friends, family, colleagues, anybody who sees those headline news reports about the economy and wants to know what it means and what it means for the markets.
• 0:20
  Megan Horneman: So today, in the first couple days of the month, we tend to get the ISM reports.
• 0:24
  Megan Horneman: We got the manufacturing report the other day, but we're going to focus today on the service report because the majority of money that Americans spend is in the service side of the economy.
• 0:34
  Megan Horneman: And what we saw today was that that service index did rise a little bit from the month of July.
• 0:40
  Megan Horneman: The one thing that we'll note in this is in the manufacturing side of this, this tends to be prices that are paid for goods, goods, but in the service side, this is for services.
• 0:50
  Megan Horneman: So think about the prices that we pay on things like financial services, entertainment, accounting services.
• 0:57
  Megan Horneman: We did see this prices paid component jump.
• 0:59
  Megan Horneman: It's now at the highest level that we've seen since August of 2022.
• 1:04
  Megan Horneman: And that's when we were really in the depths of some of the inflationary period after the pandemic.
• 1:09
  Megan Horneman: So this is something to keep an eye on.
• 1:12
  Megan Horneman: There was pretty much broad-based strength in this.
• 1:15
  Megan Horneman: We have the business activity rising.
• 1:17
  Megan Horneman: That was the highest level since November of 22.
• 1:20
  Megan Horneman: We saw new orders also take a nice big jump.
• 1:22
  Megan Horneman: They were up to the highest level since February of 2023.
• 1:26
  Megan Horneman: So solid news from the economy, but still that stubborn inflationary pressure that the Fed is going to be concerned about.
• 1:33
  Megan Horneman: Today the markets, the equity markets are up significantly.
• 1:37
  Megan Horneman: A lot of this has to do on some on the back of some Fed speech that said that they might be comfortable with keeping rates where they are if the inflation doesn't surprise.
• 1:46
  Megan Horneman: Shocking.
• 1:47
  Megan Horneman: If inflation doesn't surprise, then some of the Fed officials have already said that they're going to maybe keep rates on hold.
• 1:54
  Megan Horneman: Unfortunately, that's not the sentiment of every Fed official.
• 1:57
  Megan Horneman: And the markets are just grasping at any positive news that the Fed won't hate rate won't raise rates.
• 2:03
  Megan Horneman: That's a bigger risk to the market than we see than them staying on hold.
• 2:07
  Megan Horneman: Tomorrow we'll get the employment report for the month of August.
• 2:11
  Megan Horneman: And this is the last employment report the Fed will get before they have to make that interest rate decision.
• 2:16
  Megan Horneman: So if the employment market stays relatively solid, inflation still is a problem.
• 2:22
  Megan Horneman: There's going to be a lot more speech coming out and rhetoric from Federal Reserve officials, especially at the meeting, that they want to tighten monetary policy.
• 2:30
  Megan Horneman: That's all we have for today.
• 2:31
  Megan Horneman: If you want a history of our podcast, you go to markets with Megan.fm.
• 2:34
  Megan Horneman: Thank you.