Last week concluded the last potentially influential earnings report with Nvidia (NVDA). It came in with a beat on both top and bottom line numbers but the guidance came in mixed. The market moved a lot on the report but by the time the next morning came around it was like nothing happened.
This week has news spaced out almost every day as well as a bank holiday for the US.
Here are 5 things to watch this week in the Market.
Bank Holiday
Monday the US will celebrate Labor Day. Banks and most markets will be closed in observance of the Holiday so liquidity could be low on Tuesday as people come back from long weekends. This also is the official end of summer trading.
ISM Manufacturing and Services
ISM has two reports out this week, the Manufacturing PMI on Tuesday and the Services PMI on Thursday. The economy appears to be softening and both of these reports could produce a similar effect on the market. As the Fed has pointed towards a rate cut in September, we could be back to good news is actually good for the markets, so if either report comes in as a match or beat we could see the market react positively. If either report misses we could see the market react poorly. Because these reports are a few days apart it is unlikely that one will influence the reaction of the other. Both of these reports come out after the New York open so they could impact live trading.
JOLTS
Wednesday morning JOLTS is out, and this is a measure of job openings and employment strength. To show strength in the economy the reported number should be at or higher than estimates which this month is 8 million flat. This could cause some volatility around the release but is really more of a show of strength or weakness in the overall market.
ADP Employment
On the other side of the jobs opening report is the unemployment change. This week both ADP employment change and Non-farm payrolls are due. Similar to JOLTS the best result would be a match or beat of the estimate which this month is 136,000 job additions. If the number comes in weak then the market could start to sell off on a weakening economy. This would be good in the sense that it could confirm the need for rate cuts, but it would be a bad sign for the economy.
Nonfarm Payrolls
The final report out on the week is the government's payroll data, Non-Farm Payrolls. Similar to the ADP report above, any match or beat of the estimates could be seen as a positive for the economy and the market as a whole. This release will be particularly interesting for another reason and that is the recent BLS update to the previous payroll reports. It came out that payroll estimates were high by roughly 800,000 jobs, creating a material revision to the previous 12 months. This could be reflected in this release in that traders may not believe the data as it is displayed creating a discrepancy between the report results and the reaction.
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.
