By Alex Eule | Thursday, September 4

Bad Is Good Again. Stocks have re-entered the strange world in which bad news is treated as good by traders. In recent days, those worried about the jobs market and the economy have received several forms of confirmation. Yesterday’s JOLTS report showed jobs openings had fallen below the number of people seeking jobs for the first time since before the pandemic.

Nicholas Colas, co-founder of DataTrek, called out the significance of the report in a note to clients:

A good deal of the ‘American Exceptionalism trade’ has been predicated on the notion of a resilient, almost recession-proof, U.S. labor market, but today’s JOLTS report is a crack in that foundational idea. It is too early to say that this dynamic is gone forever, but Friday’s jobs report just became even more important to investor confidence in the U.S. economy.

Colas is talking about the August payrolls data scheduled to arrive at 8:30 a.m. tomorrow morning. Economists surveyed by FactSet expect 80,000 jobs were created last month.

But, in a potential preview of what’s to come, today’s ADP National Employment Report showed that the private sector added 54,000 jobs in August. ADP’s report often doesn’t match up with the government data, but it did confirm the downbeat sentiment.

Investors’ reaction to all this has been to buy stocks because a weaker labor market increases the likelihood of a rate cut at the Federal Reserve’s meeting this month—and at the meetings to follow.

After a muted open, the major indexes gained ground into the close. The S&P 500 ended the day up 0.8%, closing at a record high. The Nasdaq Composite added 1.0%, while the Dow Jones Industrial Average rose 350 points, or 0.8%.

Depending on the jobs data, stocks could move sharply at tomorrow’s open. Barron’s will be covering the report in real time here.

DJIA: +0.77% to 45,621.29
S&P 500: +0.83% to 6,502.08
Nasdaq: +0.98% to 21,707.69

The Hot Stock: T. Rowe Price Group +5.8%
The Biggest Loser: Estee Lauder -4.9%

Best Sector: Consumer Discretionary +1.8%
Worst Sector: Utilities -0.1%

New Life for T. Rowe

T. Rowe Price was the best performing stock in the S&P 500 today, rising 5.8%. The stock jumped on news—reported by my colleague Rebecca Ungarino early this morning—that Goldman Sachs would invest $1 billion in the beleaguered asset manager.

Shares of T. Rowe Price, which was founded in 1937, have struggled for years, as investors turned from mutual funds to cheaper ETFs.

But Goldman is making a bet that teaming up with T. Rowe to launch co-branded model portfolios and target-date products could recharge the business. Ultimately, the partnership seeks to expand access to private-market products, historically outside the reach of everyday investors in T. Rowe funds.

The partnership could be well-timed to take advantage of a changing political climate, while adapting to disruptive forces in the investment world. Rebecca writes:

The deal underlines major forces shaping the asset- and wealth-management industries. The Trump administration has given money managers a green light to start adding illiquid assets, such as private equity and private credit, to retirement funds after much lobbying from Wall Street. Money managers are seizing on that opportunity to boost their businesses and charge higher management fees on illiquid funds.

Meanwhile, fund managers whose mutual and exchange-traded funds command far lower fees than they did years ago are joining forces to stay competitive and pull in assets. Average expense ratios for equity and bond mutual funds have fallen 62% and 55%, respectively, from the mid-1990s through 2024, according to the Investment Company Institute.

Goldman intends to buy up to 3.5% of T. Rowe’s outstanding stock. Shares of Goldman were up 2.6% on the day, outperforming the broader market and the financial sector.

Read more about the deal from Rebecca here.