Last week was a pretty slow week in the markets. Quarter-end and month-end positioning can always be slow, but last week felt particularly bad. The S&P 500 ($SPX) (SPY) finished the week up a paltry 0.17% showing just how slow the week was. Some other trading names like Apple (AAPL) and Tesla (TSLA) also had a slow week comparatively posting gains of 0.06% and 1.7% respectively.
This week we are back to the full swing of news without any real earnings to slow us down. A fresh quarter hopefully means some volatility back in the markets. Given the way the last Fed meeting ended, it would appear all eyes are back on rates to see if we will in fact get a rate cut this year.
Here are 5 things to watch this week in the Market.
ISM PMI’s
These PMI numbers are often an important gauge of economic activity for the specific segment that it measures. The manufacturing PMI, which is due out on Monday, has been under 50 for the past several months showing continued industry contraction throughout the manufacturing companies surveyed. With PCE coming in line with expectations last week, if we see continued contraction here the markets could rally in hopes of actually following through with rate hikes this year.
The second part of the ISM release is out on Wednesday and this is the ISM Services PMI. Unlike the manufacturing index, the services index has been in a mild expansion for the past several months with numbers coming in just over the 50 threshold. If both the manufacturing and services are on the same page and contract we could see a real rally into unemployment data later in the week. If they are mixed then we could see continued chop until more information comes out.
Fed Speakers
The Fed will continue to talk this week with several of the voting members holding press conferences and making comments throughout the week. Powell is speaking Wednesday at noon and this has the most potential to move the markets. That said, the venue he is speaking at is on Business, Government, and Society so rates could be mentioned very little. The rest of the speakers are scattered throughout the week and could cause some localized volatility when they talk.
JOLTS Job Openings
Coming out Tuesday is the JOLTS Job Openings, and this has the potential to move the markets because of how important employment is to the overall economy. The Fed has made several comments over the past weeks about not relying on employment data for rate decisions, but if labor markets continue to remain tough eventually it will factor into the decision to actually cut rates or continue to postpone.
Unemployment
There are several employment numbers out this week so we will discuss them all here. First up on Wednesday is the ADP Non-Farm Payrolls. This is the precursor to the government number out this Friday. The last several months have not been great, so a continuation of this trend could be a positive to the rate cut hopes. Out on Friday, we have the government Non-Farm payrolls report and this usually carries a lot more significance given the larger sample size. There has been no trend over the past few months so looking for alignment with the ADP number would be ideal. This could greenlight the markets for the beginning of the new quarter.
Baltimore
One other thing that could affect the markets in the coming weeks was the tragedy that took place last week on the Baltimore Bridge. It will take several years at least to get a bridge back up and functional so there could be some logistics repercussions driving prices up as drivers need to find new routes for the goods.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
