August non-farm employment performed poorly, with safe-haven asset US dollar cash taking the lead.

.201% Overall, the disappointing performance of the US August non-farm payroll report on Friday local time led to a significant division in the market on the extent of interest rate cuts, causing a major sell-off in US stocks and rendering safe-haven assets ineffective. The US dollar slightly rose in volatile trading, and cash is now considered king as the ultimate safe-haven asset. It is worth mentioning that Warren Buffett has demonstrated that "cash is king." // August Non-farm Payroll Data Falls Short of Expectations // On the evening of September 6 Beijing time, the US Bureau of Labor Statistics released the August non-farm payroll report, which showed that the number of non-farm payroll jobs in the US increased by 142,000, lower than the expected 165,000, with the previous value of an increase of 114,000. The US unemployment rate in August was 4.2%, in line with expectations and slightly lower than the previous value of 4.3%, marking the first decrease since March this year. Additionally, the non-farm payroll job additions for June were revised downward from 179,000 to 118,000, and for July from 114,000 to 89,000. After revisions, the total non-farm payroll job additions for June and July were 86,000 lower than originally reported. Despite the slowdown in job additions, the unemployment rate remains at a low level of 4.2%, indicating a slow cooling of the labor market. These data have sparked intense debates in the market regarding the extent of the Federal Reserve's rate cut this month. Federal Reserve Governor Lael Brainard stated that considering the sustained progress in inflation and the cooling of the labor market, it is now time to lower the federal funds rate target range. Prominent financial journalist Nick Timiraos, known as the "New Fed Communications Agency," analyzed that Brainard's speech did not explicitly mention 25 or 50 basis points. There is a leaning towards supporting an initial 25 basis points rate cut and retaining the option to speed up the rate cut when new data indicates further deterioration. Gennadiy Goldberg, the head of US interest rate strategy at TD Securities, pointed out that "this employment report can support a 25 basis points rate cut and also provide the basis for a 50 basis points rate cut." Currently, according to the Chicago Mercantile Exchange's "FedWatch" tool, the market believes there is a 69% chance of a 25 basis points rate cut and a 31% chance of a 50 basis points rate cut by the Federal Reserve. Data from the London Stock Exchange Group shows a significant change in market expectations after the release of employment data. Previously, there was a higher expectation of a 50 basis points rate cut at around 43%. Now, the more conservative prediction of a 25 basis points rate cut is dominating. // US Stocks Experience Significant Sell-Off // On September 6, all three major US stock indexes fell. By the close, the Dow Jones Industrial Average fell by 1.01% to 40,345.41 points, the S&P 500 Index fell by 1.73% to 5,408.42 points, and the Nasdaq fell by 2.55% to 16,690.83 points. Technology stocks declined across the board, with Apple dropping by 0.7%, Amazon by 3.65%, Netflix by 2.61%, Google by 4.02%, Facebook by 3.21%, and Microsoft by 1.64%. Bank stocks collectively declined, with JPMorgan Chase down by 2.34%, Goldman Sachs by 1.69%, Citigroup by 2.56%, Morgan Stanley by 2.99%, Bank of America by 2.75%, and Wells Fargo by 5%. Energy stocks generally fell, with Exxon Mobil down by 0.42%, Chevron by 1.7%, ConocoPhillips by 1.3%, Schlumberger by 1.44%, and Occidental Petroleum by 3.19%. Chip stocks showed weakness, with Broadcom falling by 10.36%, ASML by 5.38%, TSMC by 4.15%, Nvidia by 4.09%, AMD by 3.65%, Micron Technology by 3.37%, Qualcomm by 3.37%, and Intel by 2.63%. // Gold Prices Fall Instead of Rising // On September 6, the gold market experienced intense volatility, with gold prices approaching historical highs earlier in the day, but falling sharply following the release of US non-farm payroll data as market expectations for a Federal Reserve rate cut were shaken. Aakash Doshi, Head of North American Commodities Research at Citigroup, stated that the gold market is in an unstable state in this situation, with traders debating whether the Federal Reserve will take more aggressive rate cut measures in September. He noted, "This uncertainty is affecting gold prices, with widespread debate in the market about the magnitude of the rate cut." Darin Newsom, Senior Market Analyst at Barchart, is bearish on gold, predicting that gold prices may continue to be under pressure in the coming weeks. He said, "In the short term, gold prices may continue to consolidate near this week's lows, and the future trend remains uncertain." Adrian Day, President of Adrian Day Asset Management, is bullish on gold, expecting a further increase in market expectations for a Federal Reserve rate cut due to slowing US job growth. He stated, "In the short term, the gold market may continue to rise until the Federal Reserve's meeting." // Crude Oil Out of Control // The oil market experienced significant volatility, recording its largest single-week decline since October last year. The weak performance of US job data further exacerbated concerns about the economic outlook, affecting market expectations for oil demand. Bob Yawger, Director of Energy Futures at Mizuho Bank, commented, "The weak job report indicates that US economic growth may be slowing, directly pressuring the market's optimistic expectations for oil demand." Eric Lee, an analyst at Citigroup, further pointed out that while OPEC+'s production cut plan may support oil prices in the short term, the long-term global supply surplus will continue to suppress any oil price rebound. He predicts that by 2025, Brent crude oil prices could fall back to $60 per barrel. // US Treasury Yields Fall Across the Board // On September 6, US Treasury yields fell across the board, with the 2-year Treasury yield dropping by 9.7 basis points to 3.657%, the 3-year Treasury yield falling by 7.8 basis points to 3.536%, the 5-year Treasury yield falling by 5 basis points to 3.493%, the 10-year Treasury yield dropping by 2.1 basis points to 3.713%, and the 30-year Treasury yield declining by 0.2 basis points to 4.201%.0.02%Short-term government bonds are favored, while long-term government bonds face selling pressure. // The US dollar rises // On September 6th, the US dollar rose slightly in volatile trading, with the dollar index rising to 101.183, up 0.12% from the previous day. Currently, the market's focus will shift to the US inflation data for August. Analysts generally expect CPI and core CPI to rise by 0.2% month-on-month. If inflation data exceeds expectations, it could lead to an increase in US Treasury yields, thereby putting pressure on the price of gold. Conversely, data below expectations will provide support for gold. If CPI unexpectedly rises, the US dollar may continue to be supported in the short term. // Buffett's cash reserves reach a historical high // It is worth mentioning that Buffett has demonstrated that "cash is king". According to the Q2 US stock holding report (Form 13F), Berkshire Hathaway's cash reserves reached a record high. As of June 30, 2024, Berkshire Hathaway's stock holdings have declined for three consecutive quarters, with the total market value of holdings dropping from $332 billion to $280 billion, while cash and cash equivalents reached a record $277 billion, with the majority being short-term US Treasury bonds worth up to $234.6 billion. Short-term US Treasury bonds with a maturity of 1 year or less are included in the cash and cash equivalents category due to their rapid liquidity. This article is reprinted from the WeChat public account "Wind", edited by GMTEight: Chen Yufeng.