Tuesday, October 1st, 2024

We spent this morning’s pre-market looking ahead to a busy day for the stock market. And we got it — in fact, with the attack of Iran on Israel earlier today, in addition to the dock strike across a large swath of the U.S., we saw more market-impacting news than we had even put on the calendar.

The first trading day of October, thus, comes with a downward arrow after a relatively uncharacteristically strong September. The Dow dropped -173 points, -0.41%, and it led major indexes today. The S&P 500 shed -53 points, -0.93%, and the Nasdaq lost -278 points, -1.53%. This was a slightly steeper fall than the small-cap Russell 2000’s -1.48%.

Middle East Conflicts Expanding

Today, Iran launched nearly 200 ballistic missiles into Israel, not all of which were thwarted by the Iron Dome missile defense system. The U.S. Navy also shot down Iranian missiles on Israel’s behalf. This comes after a week of Israel’s army targeting what it called Hezbollah strongholds in Lebanon, including its capital and largest city, Beirut.

What’s next? Experts say Israel’s next move may be to strike oil reserves and shipping ports in Iran, which would send oil prices higher globally. Today, spot oil prices rose around +3%, but serious damage done to the oil supply and delivery would likely send these prices much higher.

ILA Strike on Day 1 of Q4

The most recent contract for the International Longshoremen’s Association (ILA) expired at midnight last night, and now 45K dock workers at 36 ports from Maine to Texas are now on strike. Aside from a fairer pay structure, the union wants guarantees that their jobs will not be replaced by automation.

This strike affects 35% of all U.S. imports, and could strafe between $4.5 billion and $7.5 billion off Q4 GDP. The striking ports include New York and New Jersey, the second- and third-largest in the nation. Although this currently affects 45K union workers, ripple effects could bring this number up to over 100K workers.

JOLTS Numbers for August Mostly Subdued

We saw a surprise jump in job openings in today’s Job Openings and Labor Turnover Survey (JOLTS) report for August. A headline number of 8.04 openings were recorded, higher than the 7.7 million expected, and reported for the previous month’s report. Jobs per available worker stayed at 0.9, which remains the highest level since June of 2021.

Job quits fell to their lowest level since September 2020, and the quits rate itself, at +1.9%, is the lowest we’ve seen since 2015. This shows an eroding faith among workers that they may leave their jobs and find a better one. The latest Hires Rate and Total Separations Rate are both lower month over month, to +3.3% and +3.1%, respectively.