This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

ETFs and the Unlikeliness of Fed Action in September

NEW YORK ( ETF Expert) -- If you typically review the first few paragraphs of conventional media reports, you might conclude that the United States is creating jobs at a torrid clip. Headline unemployment registered a 4 1/2 year low at 7.3%. What's more, 169,000 positions in August sure sounds like a lot of new workers, doesn't it?

The inconvenient truth of the matter is that true unemployment is at a 35-year high. Specifically the percentage of working-age individuals in the labor force hit a 1978 mark of a mere 63.2%. In other words, workers giving up the search for meaningful careers is the primary reason for the decline in the widely touted unemployment rate of 7.3%.

Sadly, the more one digs for answers, the more unpleasant the realities become. July's 162,000 number was revised down to a meager 104,000; June was revised down from 188,000 to 172,000, providing a three-month rolling average of 148,000 positions. Keep in mind, in the 2003-2007 five-year span, an average closer to 200,000 had been described as a "jobless recovery."

Honestly, I wish there were something more positive to say about the job growth. However, even the positions that are being added are largely at the lowest end of the earning spectrum and 70% of them are part-time. That's right -- part-time jobs count as gains in the headline 7.3% figure.

However, there may be a silver lining for investors, and I do mean silver. Precious metals ETFs like iShares Gold Trust (IAU), iShares Silver Trust (SLV) and PowerShares MultiSector Precious Metals (DBP) are keenly aware that the Federal Reserve is likely to hold off any significant bond tapering activity in September. These assets catapulted on the weakness of the employment data.

Courtesy of StockCharts.com

Granted, long Treasury bonds as well as extended duration Treasury bond ETFs could not buy a break since the Fed began hinting about slowing its bond purchases back in May. Even the threat of a military strike on Syria failed to lift income-oriented ETFs. With the Bureau of Labor Statistics presenting its findings for August, though, funds like iShares 20 Year Treasury (TLT) smelled the possibility of a reversal.

Courtesy of StockCharts.com

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $126.41 -1.66%
FB $81.21 0.39%
GOOG $575.33 0.34%
TSLA $200.63 -0.89%
YHOO $44.16 0.39%

Markets

DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs