Payroll rally fizzles out on economy worries

A brief post-payrolls rally has been entirely reversed as traders fret about a weakening US economy, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.

‘Sell the rally’ dominates after weak payrolls

An initially positive reaction to today’s weak payrolls report has given way to some classic ‘buy the rumour, sell the fact’ action in Friday’s afternoon trading. Traders are battling a mix of relief that today’s report confirms a September rate cut while being worried that weak period of job growth spells stagflation ahead.

September volatility starts here?

There is still plenty of scope for September’s traditional volatility to kick off, even with a Fed rate cut looming. Investors should remember that there are two types of rate cut – last September’s was the good kind, taking place in a strengthening economy. Today’s market action suggests the next cut could be the other kind, designed to help support an economy that is already on a recessionary trajectory.