Stocks rolled over again last week. With Friday's drop being ascribed to a larger-than-expected drop in the unemployment rate to 5.1 percent. As investors believe that heightens the odds of a Fed rate hike on September 17. Representing the first rate hike since 2006. You remember, the whole "good-news-is-bad" narrative.
Following is a blow-by-blow account of the week according to the daily moves in the S&P 500. The week's biggest selling was confined to Tuesday (CNBC: "Market Turmoil is Back!") and Friday (Good-jobs-report-is-bad-Fed-news narrative).
Below is a look at all notable market declines since the onset of the credit crisis. Current pullback is the third largest.

So, what's really scaring investors? China. The media has ginned up tales of China's economic woes such that many believe it will catalyze a global recession. Which is wildly untrue. In fact, we believe that China's issues could, in some part, end up as net positives for the U.S. economy. Here's why:
1. U.S exports to China consist of 7 percent of U.S. export total.
2. U.S. exports to China add up to less than 1 percent of U.S. GDP. Seriously, if China disappeared, U.S. GDP growth would be impact by around 1 percent.
3. China has increasingly realized the need to re-orient its economy to one that is more consumer based.
4. If China wants to walk down the path of creating a consumer-based economy it will need to reduce barriers preventing migrants from living in major cities and, strengthen its weak social safety net so that consumer won't feel as if they must save so much and, reduce the state's control of the banks.
5. All of which would create massive opportunities for U.S. banks, insurance companies, healthcare firms, internet and entertainment companies.
While volatility has scared investors of late, the recent declines have created opportunities. We believe some of the best currently reside in Europe. Morgan Stanley last week issued a "full-house" buy alert on European equities. Goldman Sachs Asset Management's Sheila Patel agreed. Still, we know that the brokerage firms often serve as more a contrarian indicator than a purveyors of sage advice. So, why do we believe they may have this correct?
U.S. equities have risen for six years. European equities have not risen nearly as much. With Europe's blue-chip index, the Euro STOXX 50, up only three of the last six years. And while the S&P 500 has risen 65 percent this last decade (not including dividends), the Euro STOXX 50 is down 8 percent. That very divergence represents the source of Europe's value.
European equities are 40 percent cheaper than U.S. stocks, based on price-to-book, price-to-sales and dividend yield. And going back decades, when European stocks were that much cheaper than U.S. stocks, European equities have outperformed over the following one-, three- and five-year periods.
Further, with stocks up and unemployment down, the U.S. sits on the cusp on higher interest rates. Not in Europe. The European Central Bank (ECB) just enacted QE this year. And ECB chief Mario Draghi has said that the easing program will continue into mid-2016. Which should help to increase asset prices. Just as it did in the U.S. Allowing European stocks to grow. Even as interest rates remain low for years.
Congress returns to work this week. Jumping right into the contentious partisan debate that is the Iran Nuclear Deal. Though Republicans will do everything they can to debate and, potentially, negate the deal, Democrats have enough in their own ranks to prevent the deal from coming to a vote. Or, the President vetoes any GOP resolution, and Dems muster enough votes to uphold a veto. They'll need a third of the chamber. A calculation at which they've narrowly achieved as of last week with the addition of a few House Dems.
It could be the first time the nation sees an agreement so vital to national interests passed without a single bi-partisan vote in support. And weren't we told this president would put petty politics aside? Reach across the aisle? Seven years in, we're still waiting.
Speaking of Congress, California's Xavier Becerra, the ranking Democratic member of the House Social Security Subcommittee, has had a stroke of brilliance.
First, understand that Social Security actually comprises two programs: first, benefits to retirees and the families of deceased workers and second, disability insurance payments to those physically unable to work.
The problem? The CBO explains that the disability trust will be empty by late 2016. Representative Becerra's epiphany? Submit a bill that, if passed, will merge the disability and retirement trust funds. So "papering over" this intractable political football that nobody has been otherwise willing to touch. And continue saddling future generations with untold debt as our political professionals devise elaborate shell games that don't solve, but manage to conceal, the nation's growing debt problems.
Any wonder why the non-political professionals seem to be doing so well?
The U.S. average post-war growth rate is 3.3 percent. Often higher. Throughout the 6.5 years of the current administration, that growth rate has been 2 percent. Often lower. Resultantly, the electorate is growing increasingly resentful of those who do seem to be doing well. Not to mention a growing sense of exhaustion towards our drab, no-fresh-ideas-ever political class. Fewer than 30 percent of the nation believes the country is on the right track. And a WSJ/NBC poll last year found that 76 percent of Americans doubt their children will have a better life than they do. Those numbers speak to a huge amount of dread regarding the nation's path. And a massive antipathy towards those steering the ship.
I'm no linguist. But if this represents hope and change, then I'll defer. Until the U.S. political leadership completely re-focuses on economic growth, the economy and labor market will continue to project a slow, upwardly grinding sense of progress. Hardly the kind of booming economy that lifts all boats.
The Good
Auto sales were strong at a seasonally adjusted rate of 17.7 million, the best level in ten years... ISM non-manufacturing registered 59, beating expectations and signaling expansion... New home loans continue to pick up... Fed Beige Book was positive... State economies look solid... Employment scene continues to grind higher... Wage gains rose 2.2 percent...
The Bad
Payroll employment gains rose only 173K, missing expectations of 200K... Factory order missed expectations... ISM manufacturing was weak at 51.1, missing expectations...
The Ugly
Illinois state finances... even lottery winners are no longer getting paid...
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Weekly Results
Major markets finished lower last week. The DJIA lost 3.25%, the S&P 500 dropped 3.40%, and the Nasdaq fell 2.99%. Small cap stocks lost 2.30%. And the 10-year Treasury bond yield fell 5 basis points to 2.30%. Gold dropped $10.10 per ounce, or 0.89%.