Last week, market activity was sluggish, typical of quarter-end and month-end positioning. The S&P 500 edged up by just 0.17%, reflecting the slow pace. Other stocks, like Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA), also saw modest gains, with increases of 0.06% and 1.7%, respectively.
This week, however, we expect a return to more active trading as we enter a new quarter without major earnings reports to dampen the momentum. Following the last Fed meeting, which left the possibility of rate cuts open, all eyes are on interest rates this year.
Here are five key events to watch in the market this week:
ISM PMI Data
The Purchasing Managers’ Index (PMI) numbers, especially for manufacturing (due Monday), provide crucial insights into economic activity. With the manufacturing PMI showing continued contraction below 50 in recent months, a further decline could spur hopes of rate cuts and lead to a market rally. On Wednesday, the ISM Services PMI will be released, which has been in a mild expansion phase. Consistent contraction in both manufacturing and services could fuel a rally, while mixed data could lead to market volatility.
Fed Speakers
Several Federal Reserve voting members will speak this week, with Chairman Powell scheduled for Wednesday at noon. His speech, focused on business, government, and society, may have limited mention of rates. Other Fed speakers throughout the week could cause localized market volatility.
JOLTS Job Openings
Tuesday will see the release of Job Openings and Labor Turnover Survey (JOLTS) data, which is significant for the overall economy. Despite recent Fed comments downplaying the role of employment data in rate decisions, labor market conditions could influence future rate cuts.
Unemployment Data
On Wednesday, the ADP Non-Farm Payrolls report will be released, providing insights ahead of Friday’s government report. Consistent with recent months, weak ADP data could support hopes for rate cuts. Friday’s government Non-Farm Payrolls report, with its larger sample size, will be closely watched for confirmation of trends seen in the ADP report.
Baltimore Bridge Incident
Last week’s tragic event on the Baltimore Bridge could have long-term effects on logistics and pricing. The bridge’s reconstruction will likely take years, potentially causing disruptions in transportation routes and driving up prices.
Overall, this week promises to be more eventful in the markets, with key data releases and speeches from Fed officials shaping investor sentiment and market direction.
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