Introduction to the Stock Market
The stock market will be closely watching a lot of news this week. Investors are kicking off a packed week of economic data and other inputs that could influence the trajectory of the market. Major indexes are cruising at record highs but have wavered recently as the AI trade wobbled and traders digested strong economic data that could dent odds of more aggressive rate cuts from the Fed.
Key Events to Watch
Here’s everything you need to know about what could move markets this week.
1. Jobs Report
The main event will come at the very end of the week with Friday’s nonfarm payroll report. Economists are expecting the US to have added 45,000 jobs last month. That’s up from the 22,000 payrolls added in August, which badly missed expectations. The unemployment rate, meanwhile, is expected to hold steady at 4.3%. Markets are also absorbing a handful of other data points this week related to the labor market, including:
- Job openings and labor turnover: Tuesday | 7.1 million expected openings (from 7.2 million in September)
- ADP private payrolls: Wednesday | 40,000 expected payrolls (from 54,000 in September)
- Initial jobless claims: Thursday | 228,000 expected claims (from 218,000 the prior week)
The strength of the job market is a key focus for investors as they try to chart the path of the Fed’s rate-cutting cycle. Central bank officials have pivoted from inflation to labor as the biggest driver of policy, with Fed Chair Jerome Powell nodding to softening labor conditions in public remarks since August’s Jackson Hole symposium. Traders are still largely pricing in two more cuts through the end of the year, according to the CME FedWatch tool, but a particularly strong jobs report could cause investors to reset their expectations for Fed easing.
2. Fedspeak
Markets will also be parsing comments from a big lineup of central bank speakers this week. The speakers could offer investors fresh insight into the central bank’s thoughts about the economy and the outlook for rate cuts going forward. The comments will set the tone before markets take in the central bank’s September meeting minutes, which are due next week.
3. Consumer Confidence
The September Consumer Confidence Index is set to be released Tuesday morning. That will offer investors a glimpse into how optimistic Americans are feeling about the economy, particularly as recession risks linger in the background. Economists expect the index to show a reading of 95.8. That’s down slightly from last month, when Consumer Confidence clocked in at 97.4, but still well above levels recorded during past recessions, according to data from the Conference Board.
4. Government Shutdown Risks
Investors are keeping a close eye on how US budget talks unfold this week. The government risks a shutdown beginning on Wednesday unless Congress reaches an agreement on spending or temporarily extends the budget deadline. Government shutdowns have historically had a short-lived effect on markets, but stocks could be volatile immediately after a shutdown, if one occurs.
Conclusion
In conclusion, this week is expected to be a busy one for the stock market, with several key events that could influence the trajectory of the market. The jobs report, Fedspeak, consumer confidence, and government shutdown risks are all important factors that investors will be watching closely. As the market continues to navigate these challenges, it’s essential for investors to stay informed and up-to-date on the latest developments. By keeping a close eye on these key events, investors can make more informed decisions and adjust their strategies accordingly.
