The market struggled in the latter half of last week, erasing most gains and ending nearly flat, with the SPY up just 0.24%. With earnings season winding down, fewer reports are expected to significantly impact the market.
This week is packed with potentially market-moving news, including PMI data, job statistics, and Non-Farm payrolls.
Here are five key events to watch in the market this week:
1. ISM PMI’s
On Monday and Wednesday at 10 AM Eastern, the Manufacturing and Services PMI reports will be released. Given last week’s significant miss in the Chicago PMI, these reports could induce market volatility. A miss in either report could trigger similar market reactions to last Friday, where initial gains were followed by a sell-off. Conversely, a positive surprise could lead to a market rally. As these are manufacturing reports, they could disproportionately affect manufacturing and cyclical stocks.
2. JOLTs Job Openings
The labor market remains a focal point in discussions on inflation and interest rates. The JOLTs Job Openings report, due Tuesday, provides a direct measure of labor market strength. A lower-than-expected report could signal a loosening labor market, potentially spurring a market rally. Conversely, a higher-than-expected figure could suggest a robust economy, possibly leading to market concerns and influencing the Fed Funds rate decision later this month.
3. ADP Non-Farm Employment Change
This report, a precursor to the government’s data released on Friday, indicates monthly changes in employment. Similar to the JOLTs report, a tightening labor market could exert sell-side pressure, especially with the Fed Funds decision looming. A weaker employment report could have the opposite effect, potentially boosting market sentiment.
4. Average Hourly Earnings
Released on Friday alongside Non-Farm payrolls and the unemployment rate, average hourly earnings are crucial for assessing consumer health. Although overshadowed by Non-Farm and unemployment figures, this report could indicate future economic trends. Weaker-than-expected earnings might pose inflationary concerns, while strong earnings could suggest consumers can handle higher prices.
5. Non-Farm Payrolls
The major event of the week is the Non-Farm Payrolls report on Friday at 8:30 AM. This broad economic indicator often has a substantial market impact. As a key release from the Bureau of Labor Statistics, it is heavily scrutinized. A loosening labor market could prompt market optimism, anticipating Fed action this year. Conversely, a stable or tightening market might lead to temporary sell-offs due to concerns over prolonged high interest rates extending into next year.
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