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Top 5 Things to Watch in Markets in the Week Ahead

Published 06/27/2021, 07:31 AM
Updated 06/27/2021, 07:32 AM
© Reuters

© Reuters

By Noreen Burke

Investing.com -- The U.S. jobs report on Friday will be the main economic event of the coming week, with investors hopeful for signs of improvement in the labor market after two months of slower than expected jobs growth. The second quarter is ending, and market watchers will be looking ahead to the next six months after a strong first half to 2021. OPEC+ meets on Thursday with energy traders anticipating another production increase as the demand outlook continues to recover. Meanwhile, Wednesday’s euro zone inflation data could test the European Central Bank’s resolve to look past short term price increases. Here’s what you need to know to start your week.

  1. Jobs report

The June nonfarm payrolls report is expected to show that the economy added 675,000 new jobs, pushing the unemployment rate down to 5.7% from 5.8%.

With concerns over rising inflation and the strength of the recovery to the fore of investors’ minds, markets will also be looking at other labor market statistics, including wage growth and labor force participation.

Last week Federal Reserve Chairman Jerome Powell reiterated the central bank’s commitment to encouraging a "broad and inclusive" recovery in the labor market, adding that there is still a long way to go, and that support is still needed.

“The very quick job gains of the early recovery essentially involved going back to your old job,” Powell said. “Now it’s actually finding new jobs and that’s a matching function that is more labor intensive and time consuming.”

  1. Economic data

Ahead of Friday’s jobs report, markets will get updates on pending home sales, ADP private sector payrolls, jobless claims and ISM manufacturing activity.

The ISM data is likely to underline strains on the supply chain that are pushing up costs, boosting the chances that inflation will remain at higher levels for longer.

The calendar also features appearances by several Fed officials, including New York Fed President John Williams, Philadelphia Fed President Patrick Harker, Atlanta Fed President Raphael Bostic, Richmond Fed President Thomas Barkin and Fed Vice Chair Randal Quarles.

  1. Half time

Investors may be sorry to see the first half of the year end after a strong six months in markets. Global stocks are on track to post their second strongest H1 gains since the turn of the century, but the second half looks harder to predict.

“The market has maybe dodged a few scares and as we look ahead to the second half... there are probably some more risks ahead than there were a few months ago,” James Ragan, director of wealth management research at D.A. Davidson told Reuters.

President Joe Biden’s $1.2 trillion infrastructure deal will continue to boost U.S. markets, but other concerns remain.

The rapid spread of highly contagious Covid virus variants is delaying a return to normality, while the recovery in China, a driver of the global economy, appears to be slowing. Supply chain strains are driving up inflation making it harder for major economies to justify more stimulus, while several emerging market central banks are already hiking rates as a precaution.

  1. OPEC+ meeting

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+ will hold a series of meeting in the coming week to review the situation in the global oil market ahead of an official meeting on Thursday.

Thursday’s meeting is expected to result in another boost in output as the demand outlook continues to recover.

Oil prices climbed to their highest since October 2018 on Friday, putting both benchmarks up for a fifth week in a row.

“Crude prices rallied on an improving demand outlook and over expectations the market will remain tight as OPEC+ is likely to only deliver a small boost to output at the July 1st ministerial meeting," Edward Moya, senior market analyst at OANDA told Reuters.

  1. Euro zone inflation

The euro zone is to release flash June inflation figures on Wednesday as the debate around rising price pressures continues.

Euro zone inflation rose above the ECB’s 2% target in May, but ECB chief economist Philip Lane has dismissed inflation pressures as temporary, pointing to weak wage growth.

But other ECB board members have begun to publicly consider the possibility that recent price spikes caused by supply bottlenecks could turn into a longer-term trend. The great debate continues.

--Reuters contributed to this report

Latest comments

Market goes up ...Job reports will be better, especially in the republican states. No more extended unemployment benefits anymore. People have no choice just to go back to work.
I constantly received anonymous coals - ,stay home, be save .
It doesn 't benefit the crooks in the game if the market goes down. Madoff was an amateur compared to Goldman and others.
Inflation is transitory and growth is perpetual... Problems are momentary and glory is permanent... Yes entirely possible , thanks to generosity of Fed
No offense but I am curious if people like you are taking most or all of your money out of the markets? Also what do you do with it when you take it out? Bonds?
Nobody wants to work for slave wages anymore. Societal and civil unrest due to wealth inequality is about to completely explode and bring the USA to its knees.
" nobody wants to work" anymore...good point...
You guys watch too much fake news
Suggestion for investing.com to be able to have the Top 5 things to watch for two weeks, 3 weeks ahead, a month ahead? Option traders would love that information. Anyone else feel the same way?
Goto the economic callendar and filter the top market impacts. They write nothing more than top impacts.
i guess oil will be 100$
Anyone buying right now will not see a return on their investment for 40 years. We are just like Japan in 1989
crude price and gold price in this week ?
Japanese yen was never world reserve currency according to all my research in forex...
everything depend on next election !
Economic numbers will stay second-rate at best. However, the market will stay strong, supported by unending new money creation. Stay invested.
CEO's of banks, hedge funds, also many "amateur investors" like Ray Dalio, Michael Burry, etc have given quite a few warnings. Sorry if you don't count them to "pros". And no matter who I'd list, you obviously know better than anyone and only way is up, always up.
 I'm not saying a good correction wont happen but I don't think we are looking at full blown crash. Where are you keeping your money? I think people like yourself are traumatized by the last 2 crashes to be honest with you. Real crashes don't happen often and we just had one a year ago. Odds are not on your side. What bank CEO  said the economy is going to crash?
 Perhaps, Jouni confuses “market” with “economy”, pretty common mistake. The economy may get in troubles and some folks can make warnings. On the other hand, market will stay strong anyway. That’s by design. Once money-creation model adopted, the market will be permanently inflated.
Investors are witnessing the “biggest US fantasy trip of all time” in the stock market thanks to a clueless Federal Reserve, speedy stimulus and surprising success with Covid-19 vaccinations, according to Jeremy Grantham, financial historian and co-founder of the investment firm GMO.
No idea, I'm wondering the same if there's any safe haven or not
People like you are so upset that the common man got stimulus in the form of our own tax money back. It's our money and guess what. If covid never hit they would have spent it on something else. I've been hearing people cry about the deficit and how it's to high and going to ruin the country for 30 years now.
 Keep your money in a savings account if you are afraid of a crash. After it happens you will be glad you have it.
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