Markets got off to another rough start this week with the tech-heavy NASDAQ leading losses as the index fell more than 2% on Monday.
Facebook (FB) which had a slew of technical difficulties throughout the day in the middle of a sea of PR difficulties certainly did not help tech stocks as shares of the firm dropped more than 5%.
Going forward, investors will be awaiting the September Employment Situation Report on Friday to see how many jobs the economy added last month. Other economic data set to release this week are the ADP Employment Change and weekly unemployment claims numbers. Meanwhile, earnings are very light this week as earnings season starts next week with many large financial institutions set to report then.
Jobs Report
The largest focus this week will be on last month’s employment changes as the economy continues to recover from the coronavirus pandemic. Currently economists estimate that the economy added 450,000 jobs in September, nearly twice as many as the 235,000 added in August. Meanwhile, the unemployment rate is expected to drop just slightly from 5.2% to 5.1%. Lastly, average hourly earnings are projected to rise 0.4% in September after increasing 0.6% the previous month.
The current projections are nothing extraordinary but if met would signal a continued consistent recovery. The unemployment rate has been steadily falling over the past year with only brief stalls early in the summer this year and at the end of 2020. A rate above 5% is certainly not exemplary compared to the sub 4% rate before the pandemic, however, it's roughly where the economy was fully five years after the financial crisis. Meanwhile, it’s been only a year and a half since COVID-19 ravaged the global economy.
Other Data
Before the jobs report on Friday, investors will take in new unemployment claims data and the ADP Employment Change earlier in the week.
Analysts currently expect initial claims to inch lower from 362,000 to 340,000. After a strong downward decline in unemployment claims in the first half of the year, claims have been relatively flat since June as the week ending June 5 had reported 374,000 new claims. The stagnation of new claims is very disappointing given that the pre-coronavirus numbers hovered just above 200,000 new claims per week.
ADP is projected to show 405,000 jobs were added to the private sector in September a slight increase from 374,000 reported in August.
Earnings Season on the Way
Few names are reporting quarterly results this week, the biggest names set to release are Levi Strauss (LEVI), Constellation Brands (STZ), and Conagra (CAG). However, next week gets much more interesting as earnings season kicks off with some of the world’s largest financial institutions set to report.
Banks such as JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC) will release quarterly earnings. The results should give some good insight into how well the economy performed over the past quarter and current thoughts on the debt ceiling situation. Maybe some will even comment on the idea for minting a trillion-dollar coin.
Economic Events this Week
Tuesday
- 8:30 a.m. - Trade Balance
- 10:00 a.m. - ISM Non-Manufacturing Index
Wednesday
- 10:30 a.m. - EIA Crude Oil Inventories
Thursday
- 8:30 a.m. - Initial & Continuing Claims
Friday
- 8:30 a.m. - Nonfarm Payrolls
- 8:30 a.m. - Unemployment Rate
- 8:30 a.m. - Average Hourly Earnings
Earnings Reports This Week
Wednesday:
Before the bell:
STZ, RPM, AYI
After the bell:
LEVI, RGP
Thursday:
Before the bell:
CAG, LW, HELE
After the bell:
ACCD
Sector and Industry Sentiment
You can now see which sectors and industries are performing best for each of our metrics using our new Sector and Industry Analysis tools.
