Jobs Report, Gold Prices, and Other News Affecting Your Money This Week


The U.S. stock market begins a fresh month of trading following its best first half of a year since 1997.

To appreciate just how strong the surge has been, consider this: The S&P 500—the benchmark index for U.S. stocks—is up more than 17% this year, compared to an average annual return of about 10%, historically.

One of the biggest topics on Wall Street in recent months is back in focus following the weekend meeting between U.S. President Donald Trump and Chinese President Xi Jinping to discuss trade at the G20 summit. Trump and Xi agreed not to impose new tariffs on goods from the other country and to resume negotiations. The S&P 500 opened Monday almost 1% higher following this news.

Another a topic of concern is the recent spike in gold prices, which suggests some traders are worried about a slowdown. They'll get some more clues this week with key economic reports. Here's what they'll be watching.

Wall Street wants to see if hiring has rebounded

What's happening: The monthly employment report always is a must-watch event for Wall Street types—and they will be paying especially close attention to the next one, scheduled to be released Friday. That's because job growth lagged in May, so traders will want to see if hiring rebounded in June. Economists expect it did.

Why it matters: Traders are feeling more nervous about the pace of U.S. economic growth, particularly as recent reports suggest some slowing. Last week, for example, a key measure of consumer confidence fell to its lowest level in nearly two years.

This month's reports will also be very important as Federal Reserve policymakers weigh the possibility of lowering interest rates when they meet at the end of July. Traders currently think it's a sure thing that the Fed will cut rates, and another weaker-than-expected jobs report could give the Fed more reason to do so, while a very strong report might cause it to hold off. Lower rates can help stimulate economic growth because they make money cheaper for individuals and businesses to borrow.

What it means to you: If you have a job, the monthly employment report is relevant because it also includes information about average hourly earnings. If companies are keen to expand payrolls—or pay current employees more—that can influence whether your employer does the same. Tracking this monthly report also helps when you're thinking of switching jobs or asking for a wage increase.

Gold prices reflect some traders' anxieties

What's happening: Gold prices are surging lately. Prices were up more than 10% in June, and last week reached the highest level in six years, though prices have since fallen about 2%.

Why it matters: Gold is considered to be a safe haven, meaning it's an asset traders favor during periods of slower economic growth. Experts think the recent spike in gold prices is in part due to expectations that the Fed will cut interest rates to sustain economic growth.

What it means to you: You may not invest in gold, but the recent spike in prices can mean it's a better time to sell old jewelry or coins. It's also good to understand why gold prices have gone up in the first place, and that's because some people on Wall Street are concerned about a possible slowdown, especially now that the economic expansion is 10 years old.

The bottom line

Traders will try to piece together all the economic reports leading up to the meeting of Federal Reserve policymakers at month's end. That means there could be some bumpiness if key economic reports, like Friday's jobs report, turn out to be weaker than expected. If you're investing for the long haul, you don't have to react to these market fluctuations; the smart move is to stay the course.

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