Stocks Continue Upward Trend
In recent weeks, the stock market has witnessed positive momentum, with major indices like the S&P 500 and Dow Jones Industrial Average both increasing by about 0.7%. Meanwhile, the Nasdaq Composite saw a growth of nearly 1%. These gains are indicative of investors responding positively to signs of cooling inflation while economic growth remains stable.
Labor Market Insights
Upcoming labor data, specifically the September jobs report, is highly anticipated to shed light on the labor market's cooling pace. Key metrics to watch include job openings, manufacturing sector activity, and consumer confidence. The Federal Reserve's focus has shifted towards achieving maximum employment, as inflation appears to be aligning closer to its 2% target. Recent trends show unemployment at 4.2%, its highest in almost three years, with job growth slowing.
Predicted Labor Market Trends
Analysts predict that the September jobs report will reveal the addition of about 130,000 nonfarm payroll jobs, with unemployment steady at 4.2%. Previously, August saw 142,000 jobs added. As the labor market eases, weekly jobless claims hit a four-month low, signaling potential stability. Economist Aditya Bhave suggests that low layoff numbers may lead to a "decent" employment report.
Corporate Earnings Focus
Nike is set to announce its fiscal first-quarter earnings with projections of $11.65 billion in revenue and $0.52 earnings per share. This marks a decline from the previous year, highlighting the challenges the brand faces, including leadership changes and market pressures, particularly in China.
Tesla's Performance and Projections
Tesla shares have surged by over 24% in recent weeks. The company's upcoming third-quarter delivery numbers are estimated to be around 462,000 cars, a 6% increase from last year. Tesla's anticipated robotaxi reveal on October 10 is also generating buzz.
Investor Sentiment on Growth
Investor sentiment is driven by the Fed's decision to reduce interest rates amid a "healthy" economy, fostering a bullish outlook for stocks. Citi's Stuart Kaiser emphasizes that continued strong consumer spending is favorable for equity markets. However, a poor labor report could counteract this optimism.
Weekly Economic Calendar
- Monday: Chicago PMI, Dallas Fed manufacturing activity; Earnings from Carnival Corporation.
- Tuesday: S&P Global US Manufacturing PMI, JOLTS job openings, ISM Manufacturing; Earnings from Nike.
- Wednesday: MBA Mortgage Applications, ADP private payrolls; Earnings from Levi Strauss.
- Thursday: Initial jobless claims, US services PMI, Factory orders; Earnings from Constellation Brands.
- Friday: Nonfarm payrolls, unemployment rate, labor force participation data; No notable earnings releases.
