Stocks bounced on Tuesday as the ugly start to September seen last week gets at least some pushback from investors.
Tuesday’s rally in Apple shares comes ahead of the company’s event scheduled for Wednesday that is expected to see the announcement of new iPhones, among other products. The move higher in Apple also follows a note from analysts at UBS released Tuesday, with the firm raising its price target on Apple stock to $250 from $215 per share.
In its note, UBS argued that the sale of hardware — read: iPhones — is in fact a recurring source of revenue for the company, not a one-time item, and thus source of growth for the company with the average selling price of iPhones moving higher in Apple’s most recent quarter.
On Wednesday, Apple is expected reveal three new iPhones with the Apple Watch also rumored to be getting a design upgrade, the first major update to the device’s look since it debuted in 2015.
Outside of Apple’s event on Wednesday, the main economic highlight is likely to be the Federal Reserve’s latest Beige Book, a collection of economic anecdotes from each of the central bank’s 12 districts. This report helps form the basis of the discussion at the Fed’s next policy meeting, which is slated to kick off in two weeks’ time.
Elsewhere on the economic calendar investors will get the August reading on producer prices, which are expected to rise 0.2% over last month.
There are no major earnings reports set for release Wednesday.
Americans are quitting their jobs like crazy
At several junctures over the last few years, the rate at which Americans are quitting their job has pressed higher.
These have been seen as signs of rising confidence among workers and signs of a tightening labor market that could push up wages and create a more inflationary environment in the U.S. economy.
Tuesday is one of those junctures.
On Tuesday, the latest job openings and labor turnover survey, or JOLTS report, was released and showed the quits rate jumped in July to 2.4%, a new cycle high and the highest since 2001.
“The rising voluntary quits rate illustrates the confidence workers have in their ability to find new jobs,” said Andrew Hunter, U.S. economist at Capital Economics. “Along with the high share of firms planning to raise compensation, [this data] points to wage growth rising above 3% soon.”
In August, average hourly earnings rose 2.9% over last year, the most since 2009.
The biggest jumps in the quits rate over the last year have come from the professional and business services as well as the leisure and hospitality sectors. And these sectors seeing an increase in the quits rate shows, to our mind, that both high-pay, high-education jobs as well as lower-pay, low-educations jobs are seeing workers up and leave.
“Workers are feeling more and more confident in this labor market,” said Nick Bunker, an economist at Indeed Hiring Lab. “Right now, workers are leveraging the tighter labor market to find new opportunities and employers are poaching workers from other firms. The next question is how more quitting will translate into higher wage growth.”
Work out of the Atlanta Fed has shown that job switchers see wage increases which exceed those of job stayers. In other words, if you want a raise, get a new job.
And with more workers quitting their jobs it appears that this market signal is making its way to America’s workers.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland