Top 5 things to watch in the markets for the coming week
By Noreen Burke
Investing.com – The May Non-Farm Wages Report Is The Main Event For The Week Ahead, With Investors Looking To See If April’s Surprisingly Weak Jobs Report Was Just A One-Time Incident . In a week shortened by Monday’s public holiday, the strength of the recovery will be in the foreground, with updates due on activity in the manufacturing and services sector, private sector hiring and jobless claims . Several Federal Reserve decision-makers are also expected to speak. Energy traders will consider Tuesday’s OPEC + meeting and the eurozone is due to release inflation data amid concerns over what rising price pressures could mean for expansionary monetary policy. Here’s what you need to know to start your week.
May jobs report could echo April weakness
Friday’s May Jobs Report will show whether the unexpected weakness seen in April’s Jobs Report was one-time or the start of a more persistent slowdown in the labor market recovery.
The economy should have added 650,000 new jobs in May.
Only 266,000 jobs were created in April, well below the expected million. The economy still lacks more than 8 million jobs compared to what it was before the pandemic.
Economists generally still expect strong job growth in the coming months as the economy reopens.
Oxford Economics chief US economist Gregory Daco said at this point he expected 500,000 to 750,000 new jobs to be created in May, and “that could pick up.”
ISM PMI, Fed stakeholders
ISM Manufacturing the release of the data is scheduled for Tuesday, followed by ISM Services data Thursday. Both readings should be solid, but highlight supply chain issues that lead to shortages and higher prices.
The Fed’s beige book on the economy is due out on Wednesday and several Federal Reserve officials are expected to speak during the week, including President Jerome Powell. The Fed chairman will take part in a panel Friday at a climate change conference with International Monetary Fund chief Kristalina Georgieva and European Central Bank president Christine Lagarde.
Other Fed speakers during the week included Fed Vice Chairman Randal Quarles, Fed Governor Lael Brainard, Philadelphia Fed Chairman Patrick Harker, Atlanta Fed Chairman Raphael Bostic, Chicago Fed Chairman Charles Evans and Dallas Fed Chairman Robert Kaplan.
Distrustful stock market
Equity investors will be watching economic data and comments from Fed officials closely amid lingering concerns that the central bank could begin to withdraw its massive stimulus measures as price pressures increase.
Inflationary concerns have persisted for several weeks and weighed on growth names, dragging down the Nasdaq, which recorded its first monthly decline since October.
Volatility rose even as the S&P 500 rebounded less than 1% below its May 7 high, and the index recorded its smallest monthly gain in the last four months of May.
The US Stock Exchange will be closed Monday for the Memorial Day holiday.
Eurozone inflation data
The euro zone will release what we will be watching closely in flash inflation figures Tuesday.
Inflation in the bloc is fast approaching the ECB’s 2% target, but like their US central bank counterparts, US central bank officials argue this is likely temporary.
Last week, ECB Chief Economist Philip Lane said there was “almost no connection between any price spikes when the global economy reopens and what is happening in the inflation trend “.
He added that markets will take years to return to pre-crisis levels and that stimulus measures are still needed to ensure the recovery.
The ECB is expected to discuss the prospect of slowing the pace of its bond purchases to reflect the strengthening recovery at its meeting in June.
OPEC + meeting
The Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC +, is expected to stick to the current pace of gradual easing of oil supply restrictions in its next Meet Tuesday, in the hope of a strong recovery in demand.
Since OPEC + decided to cut cuts to 2.1 million barrels per day in April, oil has extended its 2021 rally and is currently up more than 30% and is approaching $ 70 a barrel. .
Concerns about a possible increase in supply from Iran limited oil gains.
Iran and world powers are negotiating what steps Tehran and Washington need to take on nuclear sanctions and activities to return to full compliance with Iran’s 2015 nuclear pact.
If a deal is struck, Iran could add up to 2 million barrels a day to global supply.
-Reuters contributed to this report