Week Ahead on Wall Street: Labor Day Encore

Short But Sweet

The week of Labor Day is a short one for many investors. U.S. markets were closed on Monday, and not everyone may have hit the ground running on Tuesday. But don’t mistake a shorter week for an uneventful one, especially since we have a different kind of labor day coming up!

This one isn’t a federal holiday, but on Friday we’ll get a fresh look at the U.S. labor market with the Bureau of Labor Statistics’ August jobs report. The stakes are pretty high for this economic release: If weakness from the last employment report has carried over into this one, concerns of a looming recession could pick up. In such a situation, the Federal Reserve might find itself under pressure to deliver a bigger-than-expected interest rate cut at their September meeting, while investor expectations for further rate cuts would intensify. Currently, market expectations are still leaning towards a 25 basis point rate reduction, which is the Fed’s standard increment for moving rates, according to the CME FedWatch tool.

Economic and Earnings Calendar

Wednesday

• July Trade Balance: Trade, made up of exports and imports, is an important driver of economic activity.

• July Job Openings and Labor Turnover Survey: A key measure of business demand for labor is the number of job openings, since reducing openings is easier and preferable to layoffs. The layoffs, hires, and quits rates that are contained in the same report give further insight into labor market dynamics.

• July Factory and Durable Goods Orders: These metrics give insight into underlying trends for leading cyclical indicators.

• Fed Beige Book: This report is released eight times per year and tracks the state of the economy based on qualitative information.

• August Wards Total Vehicle Sales: Cars are a big ticket item for consumers, so underlying vehicle sales trends can help shine a light on demand for durable goods.

• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

• Earnings: Copart (CPRT), Dollar Tree (DLTR), Hewlett Packard Enterprise (HPE), Hormel Foods (HRL)

Thursday

• August Challenger Job Cuts: The firm Challenger, Gray & Christmas tracks the number of layoff announcements each month by sector.

• August ADP Employment Report: This survey, usually released a day or two before the official government jobs report, offers insight into private sector employment trends.

• 2Q Productivity and Unit Labor Costs: These measures provide a breakdown of how productive workers were per hour of work and at what cost.

• August S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.

• August ISM Services PMI: This index from the Institute for Supply Management tracks how purchasing managers across different services industries feel about the business environment.

• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

• Earnings: Broadcom (AVGO)

Friday

• August Employment Situation Summary: This monthly blockbuster release from the Labor Department gives a comprehensive look at employment, wages, and hours worked in the previous month.

• Fedspeak: New York Fed President John Williams will deliver keynote remarks at a Council on Foreign Relations event. Fed Governor Christopher Waller will discuss the economic outlook.

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