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Top 5 Things to Watch in Markets in the Week Ahead

EconomySep 05, 2021 06:49AM ET
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© Reuters

By Noreen Burke

Investing.com -- The U.S. economic calendar is light for what will be a holiday-shortened week with figures on producer price inflation getting top billing, while jobless claims numbers could command more attention than usual after the big miss in Friday’s jobs report. Comments by Federal Reserve officials will also be in focus after the disappointing August employment report. Stock markets are likely to remain supported after the jobs data undermined the argument for near-term tapering. Meanwhile, the European Central Bank is expected to debate whether to scale back stimulus at this week’s meeting and China is to release data on trade and inflation which is expected to underline that the recovery in the world’s number two economy is losing momentum. Here’s what you need to know to start your week.

  1. U.S. data

Friday’s producer price data for August will show how inflation pressures are shaping up after July data showed the largest annual increase in over a decade, as the swift economic recovery caused a mismatch between supply and demand.

While the Fed has indicated that higher prices will likely prove transitory some worry that persistent price pressures could prompt the Fed to roll back easy money faster than expected.

Weekly jobless claims data Thursday will also be closely watched after the Labor Department reported Friday that the economy added just 235,000 jobs in August, falling far short of economists' estimate of 750,000.

Hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections. But the unemployment rate fell to 5.2% from 5.4% in July and July job growth was revised sharply higher, pointing to underlying strength in the economy.

  1. Fed speakers

Market participants will be watching out for any fresh clues on tapering from Fed officials in the wake of Friday’s disappointing jobs report.

The labor market remains the key touchstone for the Fed, with Chair Jerome Powell indicating last week that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases.

New York Fed President John Williams, who is viewed as close to Powell, is to speak about the economic outlook at an event on Wednesday. Dallas Fed President Robert Kaplan is also due to speak on Wednesday.

Kaplan is due to speak again on Thursday. Chicago Fed President Charles Evans, Boston Fed President Eric Rosengren and Minneapolis Fed President Neel Kashkari are also all due to make appearances on Thursday.

  1. Stock markets

U.S. markets will be closed for the Labor Day holiday on Monday and activity could remain subdued as traders return after the long weekend.

The Nasdaq ended Friday at a new peak, but the two other main indexes fell following the far weaker-than-expected jobs report which raised fears about the pace of economic recovery but weakened the argument for tapering this month.

Investors will also be watching out for quarterly results from video game retailer GameStop (NYSE:GME), whose wild ride this year put a spotlight on retail investors' mania for so-called meme stocks that some say is one sign of irrational exuberance in markets.

  1. ECB meeting

The ECB meets on Thursday against a background of calls from several hawkish policymakers to begin slowing its pandemic-era asset purchase stimulus program given a recent spike in inflation.

Inflation in the euro area has surged to a 10-year high of 3%. The ECB has indicated that any increase in inflation is likely to be temporary, but some hawkish officials have recently diverged from this view.

Markets are starting to react to the potential for more sustained euro zone inflation and reduced stimulus from the ECB.

  1. China data

On Monday China releases August trade data which will be followed on Wednesday by figures on both consumer and producer inflation, also for last month.

The reports come after a recent run of weak economic data which showed that the recovery in the world’s second largest economy is running out of steam amid restrictions to curb the spread of the Delta variant.

Activity in China's services sector slumped into sharp contraction in August, a private survey showed on Friday and a similar survey of the manufacturing sector showed that factory activity contracted for the first time in almost one-and-a-half years last month.

The slowdown has fueled expectations Beijing will roll out more support measures to revitalize growth.

--Reuters contributed to this report

Top 5 Things to Watch in Markets in the Week Ahead
 

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Comments (14)
David Barton
David Barton Sep 06, 2021 3:09PM ET
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Bad news is bullish Good news is bullish All news is bullish Forget the news Be bullish. Is that so hard to understand? Let's go jets!
David Barton
David Barton Sep 06, 2021 3:07PM ET
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Bad news is bullish Good news is bullish Is that so hard to understand? Let's go jets!
Chris Garcia
Chris Garcia Sep 06, 2021 11:45AM ET
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GameStop is going to produce monster earnings numbers. Get in now before it’s too late! 🚀🚀🚀
Alvaro Sánchez de Carlos
Alvaro Sánchez de Carlos Sep 05, 2021 3:00PM ET
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I always read these posts on Sunday.  Keep them up!
Ronald Warren
Ronald Warren Sep 05, 2021 11:29AM ET
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One thing is for certain. This market will not dump until we get a sudden event to take it down. Kamala taking over if Biden's mind fails? Who knows? There will be no warning. Last week I jumped on the put train. I will increase my puts every month until she dumps! One thing to keep in mind if you're going to short. When the market does go, it will be extremely drastic and trading could be shut down for the week. Make sure your puts are at least two weeks out, preferably options expiration date. Don't let them steal your money!
Yelen Shim
Yelen Shim Sep 05, 2021 11:29AM ET
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Have you forgotten your pill again?
Steffen vdm
Steffen vdm Sep 05, 2021 11:15AM ET
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"reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases". Guess what? Job numbers were disappointing. Isn't that a coincidence? How convenient...
Jerry okoye
Jerry okoye Sep 05, 2021 11:15AM ET
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U II, uouipoiig 🤔and oiu
Samuel ogwuche
Samuel ogwuche Sep 05, 2021 11:15AM ET
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hello
Gordon Steward
niagara Sep 05, 2021 10:46AM ET
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Its seems reasonable to understand gold not rising exponentially since there are so many supposed  safe haven assets  including even real estate.  Gold could go below 1500 this year and the producers  as a percentage.
Kaveh Sun
Kaveh Sun Sep 05, 2021 10:46AM ET
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The bitcoin, digital currencies, market slowly eat gold. More n more put money into that market despite China crackdown.
Ioannis Lazaridis
Ioannis Lazaridis Sep 05, 2021 10:41AM ET
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I agree with many other posters : US Government, Tresury and FED don't allow the market to roll over. The so long waited correction of 5-10% is been limited to consolidation periods of 2-3 days.
Ioannis Lazaridis
Ioannis Lazaridis Sep 05, 2021 10:41AM ET
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*market to roll down...
Kaveh Sun
Kaveh Sun Sep 05, 2021 10:39AM ET
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Biden told Powell: if the market fall, u r fired
Adjarho Joel
Adjarho Joel Sep 05, 2021 10:05AM ET
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Anything about gold
Stuart Laubscher
Stuey Sep 05, 2021 10:05AM ET
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163085743880404.jpg
163085743880404.jpg I recently read an article that said gold has come down every year for the last 10 years after labor day weekend. Gold is currently high for the month- in a supplydemand zone. China trade figures due tomorrow as well, expected to be dismal. Personally I'm hoping it will drop.
Franco Dominguez
Franco Dominguez Sep 05, 2021 9:54AM ET
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tuesday falling down
Binh Nguyen
Binh Nguyen Sep 05, 2021 9:54AM ET
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Nope! The tapering talk will fade away now that data are showing a very slow economy recovery. No chance for market crash or correction for your dream cheap buying!
James Gomez
James Gomez Sep 05, 2021 9:54AM ET
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I'm guessing you have calls and you get irritated with bear talk LOL
New Jazenevd
New Jazenevd Sep 05, 2021 9:02AM ET
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Light economic calendar makes life a bit harder for the article writers: they got to find a topic daily. Talking about market, it will continue higher disregarding economic calendars. It is moved higher by higher authority: a money-printing mechanism.
Ardus Ndiri
Ardus Ndiri Sep 05, 2021 8:32AM ET
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yes
jason xx
jason xx Sep 05, 2021 8:07AM ET
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The spx didn't even "fall" 0.025% after the bad jobs data its artificially propped up and not allowed to fall.
 
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