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Top 5 Things to Watch in Markets in the Week Ahead

EconomyAug 01, 2021 06:02AM ET
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© Reuters

By Noreen Burke

Investing.com – The U.S. jobs report for July will be the highlight in the week ahead with investors on the watch for any catalysts that could encourage the Federal Reserve to tighten monetary policy sooner. The economic calendar also features the Institute for Supply Management’s PMIs along with data on factory orders and initial jobless claims. Earnings will continue to dominate headlines, with more than a quarter of S&P 500 companies set to report in the coming week. The crackdown by Chinese market regulators could continue to be a major story and in the UK the Bank of England is to hold its latest policy meeting where it is likely to echo the Fed’s view that there is still some way to go before stimulus can be reduced. Here is what you need to know to start your week.

  1. July jobs report

Friday's U.S. non-farm payrolls report will provide fresh clues on the strength of the economic recovery and inform the outlook for Fed policymakers.

Economists are expecting the economy to have added 900,000 jobs in July after a forecast-beating 850,000 in June.

Last week Fed Chair Jerome Powell said the job market still had "some ground to cover" before it would be time to start scaling back stimulus measures the central bank enacted in the spring of 2020 to combat the economic fallout from the coronavirus pandemic.

In June Fed officials began debating how to wind down bond purchases but there is no clear timetable yet for when it will begin pulling back emergency market support measures.

  1. Other economic data

Aside from the jobs report, the economic calendar also features other important data including the Institute for Supply Management’s manufacturing data Monday and service sector data on Wednesday. The ISM manufacturing PMI is expected to remain robust, but to again underline supply side strains in the economy that are contributing to higher inflation.

Data on factory orders is slated for Tuesday and the weekly report on initial jobless claims is on Thursday. Jobless claims have fallen considerably since the start of the year amid growing labor demand but the delta variant that’s fueled a recent surge in new infections across the country poses a risk.

Several Fed officials are also scheduled to speak during the week, including Boston Fed President Eric Rosengren, Fed Vice Chair Richard Clarida and Fed Governor Christopher Waller.

  1. Earnings

Investors will get a fresh batch of earnings reports in the week ahead from companies such as Eli Lilly (NYSE:LLY), CVS Health (NYSE:CVS) and General Motors (NYSE:GM).

Expectations of strong future earnings have been the key driver of the S&P 500’s gains this year, according to a Credit Suisse analysis of the index’s year-to-date performance that compared change in stock valuations with changes in expected earnings.

U.S. stocks fell on Friday and registered losses for the week as Amazon (NASDAQ:AMZN) shares dropped after the company forecast lower sales growth, but the S&P 500 still notched a sixth straight month of gains.

4. China crackdown

China’s recent regulatory crackdown has frightened investors away from Chinese stocks and left tech companies operating in an uncertain environment.

China has been tightening its regulatory grip on overseas share issuance after it launched a probe of ride-hailing giant Didi Global last month, just days after its listing in New York.

Following a sharp selloff authorities moved to calm market jitters which put a floor under stocks and the yuan, for now.

In the coming week investors will be looking to Chinese PMI data amid growing concerns over a slowdown in the world’s second largest economy, which could be the next test for markets.

  1. Bank of England meeting

The Bank of England is expected to keep stimulus running at its current pace when it meets on Thursday, despite some disagreement among policymakers over the size of its bond-buying program against a background of rising inflation and an improving economy.

So, what to watch for at the BoE meeting? Officials are likely to raise their inflation forecast for this year, but the outlook for growth remains uncertain amid concerns over the delta variant.

Also, after two policymakers recently broke ranks to advocate for an early end to its bond-buying stimulus scheme, it will be interesting to gauge whether more officials are coming around to that view.

--Reuters contributed to this report

 

Top 5 Things to Watch in Markets in the Week Ahead
 

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Comments (18)
Gerald Mejias Rod
Gerald Mejias Rod Aug 02, 2021 6:22AM ET
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Who is vetting this comments lmao
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 02, 2021 2:32AM ET
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India's second corona virus wave was pre-planned to give the Chinese Wuhan and the world a befitting reply for the first wave virus. the virus wars are on now. beware.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 02, 2021 2:29AM ET
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India's Delta was a befitting reply for the Chinese Wuhan. in such games India wins always, not even Pakistan
Bret Lafrance
Bret Lafrance Aug 01, 2021 5:31PM ET
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The fed will keep their fiot on the gas through the mid term elections at a minimum.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 01, 2021 2:16PM ET
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Indo china corona virus wars both killing machines, tit for tat virus wars, virus supremacy
Kaveh Sun
Kaveh Sun Aug 01, 2021 1:08PM ET
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Unemployment rate is the most important. If the rate is high, fed will continue pumps money into the market.
Junk Man
Junk_Man Aug 01, 2021 1:04PM ET
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Debt ceiling? Eviction moratorium?
Norma Scott
Norma Scott Aug 01, 2021 11:06AM ET
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Housing crisis is coming full speed ahead! Why is no one talking about it?
New Jazenevd
New Jazenevd Aug 01, 2021 11:06AM ET
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It is not politically correct for media to talk about problems while Dems are in power.
Martin Sidor
Martin Sidor Aug 01, 2021 11:06AM ET
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It is just temporary
Станислав Туловский
Станислав Туловский Aug 01, 2021 11:06AM ET
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What housing crisis you are talkin about?
MA AR
MA AR Aug 01, 2021 11:06AM ET
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because they went on 6 week holiday
慶太 奥泉
慶太 奥泉 Aug 01, 2021 10:51AM ET
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Just im worry about delta Virus,
Eudon Hickey
Eudon Hickey Aug 01, 2021 10:51AM ET
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Lock yourself in the room. Switch the light off. Stop living
Gil DePierro
Gil DePierro Aug 01, 2021 10:51AM ET
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I also suggest you stay in your room with the covers over you head.
Alan Szczodry
Alan Szczodry Aug 01, 2021 10:51AM ET
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google chart covid UK, worry about what ?
CHADWICK RICHINGTON
CHADWICK RICHINGTON Aug 01, 2021 10:12AM ET
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The Biden bubble is about to pop
Truth Trader
Truth Trader Aug 01, 2021 10:12AM ET
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How is the sham vote counting going for ya?
Eudon Hickey
Eudon Hickey Aug 01, 2021 10:12AM ET
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Truth Trader - i think it is fair to say, anybody that voted for biden, also support human traffic and ped o training
Dana Gagnon
Dana Gagnon Aug 01, 2021 10:12AM ET
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Eudon Hickey <<< alt right pychosis right here.
Alan Szczodry
Alan Szczodry Aug 01, 2021 10:12AM ET
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starting from Tesla?
Nathan Enright
Nathan Enright Aug 01, 2021 10:12AM ET
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don't give Biden credit that's all jpow
William Bailey
William Bailey Aug 01, 2021 10:09AM ET
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No more stimulus ( debt cieling) , no more free credit, no more free rent, less liquidity , corona variant spreading like wildfire and soon to take out GOPQ constituents …. Markets going down for good this time and no free credit to pump them
Gil DePierro
Gil DePierro Aug 01, 2021 10:09AM ET
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Going down for good. Sont really know what that means. How long would “for good mean”
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 01, 2021 9:58AM ET
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negative stimulus taper will come soon, when the Fed sells rather than buys bonds. parody
Mario tragik
Mario tragik Aug 01, 2021 9:43AM ET
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tapering wont happen any sooner even if july jobs numbers would be positive it would be only temporary. we are coming into the fall / winter with the variant more closings and restrictions ahead. so be aware of buying the dip for now. money easing will still be in effect
ZS Beck
ZS Beck Aug 01, 2021 9:41AM ET
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FED Buying 120B Treasury 900 thousand jobs expected.How much does it cost each job?
Axel Hippocrate
Axel Hippocrate Aug 01, 2021 8:57AM ET
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Jerome Powell is likely to lose his job.He is sleeping and when he is going to wake up , the market would have already collapsed
New Jazenevd
New Jazenevd Aug 01, 2021 8:51AM ET
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Jobs cannot be restored as long as government continues paying oversized unemployment benefits. Other economic numbers will be weak too, depressed by anti-business policies, promoted by Biden’s administration. On the other hand, this weakness will encourage and/or force Fed to create even more money, fueling strong stock market. In other words, the market will be firmly stronger than US economy, as long as present political regime persists.
Kelly Mayer
Kelly Mayer Aug 01, 2021 8:41AM ET
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Warren Buffet recent selling of stocks, Bill Gates as well, isntitutions hoarding cash, economic growth slowing down, inflation worries, tapering worries, Covis cases rising worldwide among the vaccinated and unvaccinated alike, WHO warning of 200 million cases and mortality increasing rapidly, flu season coming soon and the market due for a correction. Bloodbath ahead. Horrible one too.
soho electronics
soho electronics Aug 01, 2021 8:41AM ET
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cash is king. markets will have to correct. best to buy when markets hit atleast 5% correction.
Long Ly
Long Ly Aug 01, 2021 7:46AM ET
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Expect a week with full of up and down
 
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