This week's highlights include new data on the U.S. labor market, earnings reports from several retailers, and the latest inflation data.
Investors will be focusing on new data on the U.S. labor market, including job openings and the nonfarm payrolls report, as well as earnings reports from retailers and the latest inflation data.
Investors are eagerly awaiting news about the health of the US labor market, with reports on job openings, labor turnover, employment, and job cuts expected this week, as the Federal Reserve aims to cool the economy to fight inflation caused by higher labor costs.
Concerns of a stock market crash are growing as economists await the release of the second-quarter GDP report, which could provide insight into the impact of the Federal Reserve's rate-hike campaign and future monetary policy changes. The report may have a significant effect on equity markets, which have been sensitive to economic data releases this year.
Stock markets showed signs of improvement last week, fueled by hopes of a Goldilocks economic scenario, despite downward revisions in Q2 GDP growth and a slowdown in housing prices, while robust hiring and a decline in wage growth raised concerns about a cooling job market. The strength of U.S. consumers and the moderation of the Consumer Confidence index are factors that could influence the Federal Reserve's decisions on inflation, with investors advised to rely on trustworthy data and analysis. Noteworthy upcoming earnings and dividend announcements include Zscaler, Gitlab, GameStop, C3ai, American Eagle, DocuSign, and Kroger. Key economic reports this week will focus on Factory Orders, ISM Services PMI, and Q2 Non-Farm Productivity and Unit Labor Costs.
Oil prices surge to the highest level in 10 months as Saudi Arabia and Russia extend production cuts, raising concerns about inflation and higher interest rates, while the resilient U.S. economy strengthens prospects for interest rate hikes; tensions escalate in the auto sector as contract negotiations with major automakers continue; GameStop CEO Ryan Cohen faces scrutiny from the SEC over stock trades; Apple's market value plummets due to concerns over China's ban on public workers using foreign-branded devices; semiconductor stocks weaken amid export restrictions on China; energy sector excels while industrials and utilities lag; upcoming key economic data to watch includes inflation rate, Producer Price Index, retail sales figures, and Michigan Consumer Sentiment data.
Summary: The markets have experienced various shocks this week, with the most significant one coming from the Federal Reserve, making labor data more crucial than Fed discussions.
The panel discusses the upcoming Fed comments, the market's expectation of no further rate hikes in September, and the impact of high interest rates on jobs, wages, and consumer spending.
Investors are focusing on the release of economic reports on GDP and inflation as they evaluate the Federal Reserve's stance on interest rates and its efforts to cool down inflation. Metal prices have slipped due to concerns over global demand and the economy, and the risk of a government shutdown is also adding to the bearish sentiment. Earnings reports from various companies and core PCE inflation data are expected in the week ahead.
Gas prices in California slow down to an average of $5.83 per gallon, while there is a potential end to the months-long a writers' union strike, a possible strike by workers at GM and Stellantis plants, and the closure of major bank branches next year. Additionally, the Federal Reserve keeps interest rates steady, SNAP benefits will increase in October, and the 2024 Social Security COLA is expected to be lower than the previous year. Furthermore, there are concerns about the impact of a government shutdown on student loan repayments and the potential furlough of federal employees. Finally, Amazon Prime Video announces the introduction of ads for non-upgraded members, and housing market experts suggest that the first week of October may be the best time to buy a home due to increased options and fewer competitors.
Summary: This page provides full coverage of the personal income and consumer spending report, including the release of inflation data targeted by the Federal Reserve's monetary policy.
Investors will be keeping a close eye on the latest data on the U.S. labor market this week, which will have implications for consumer spending and the Federal Reserve.
The latest U.S. Jobs Report shows 336,000 new jobs added in September, exceeding expectations and indicating a strong economy that may lead to another rate hike from the Fed. Higher Treasury yields may result in more volatility in stocks and impact sectors such as mortgages and finance. However, this may also present attractive buying opportunities in beaten-down market sectors. Investors should conduct solid research and diversify their portfolios.
The U.S. stock market is currently trading at a discount to fair value, and Morningstar expects rates to come down faster due to optimism on inflation; strong growth is projected in Q3, but the economy may slow down in Q4, and inflation is expected to fall in 2023 and reach the Fed's 2% target in 2024. The report also provides outlooks for various sectors, including technology, energy, and utilities, and highlights some top stock picks. The fixed-income outlook suggests that while interest rates may rise in the short term, rates are expected to come down over time, making it a good time for longer-term fixed-income investments. The corporate bond market has outperformed this year, and although bankruptcies and downgrades may increase, investors are still being adequately compensated for the risks.
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