Week Ahead on Wall Street: Jobs and the Fed

Jobs Data To Guide Interest Rates

All eyes are on the Fed once again, as market participants are awaiting an official signal that the central bank is done raising interest rates.

In some ways the market is acting like it’s a forgone conclusion. However, this optimism is contingent on key economic indicators, including the upcoming job reports.

The strength of the labor market has been a significant consideration in conversations surrounding rate hikes. Because unemployment stayed low and job creation kept humming along, the Fed had some more flexibility to maintain a tight policy. Remember, the central bank’s mandate is two-fold: maintain stable prices, and maximum employment. A cooling labor market could reinforce the notion that monetary policies are sufficiently tight to slow the economy and combat inflation.

What’s the connection? A robust job market stands to fuel consumer spending, which drives up prices, and thus contributes to inflation, and vice versa. This week’s November jobs report, due on Friday morning, will shed more light on how America’s labor market is doing, and what that might mean for the Fed.

Economic Reports

Monday

•   October Factory Orders: Last month’s factory orders saw their largest increase since January 2021.

Tuesday

•   November Services PMI: Last month, this business activity gauge fell to its lowest level in five months.

•   October Job Openings: They hit their highest level in four months in September.

Wednesday

•   Weekly 30-Year Mortgage Rate Update: Last week’s data showed a more than two-month low of 7.37%.

•   Q3 Labor Productivity (final): Preliminary estimates showed labor productivity at its highest rate since the third quarter of 2020.

Thursday

•   Weekly Jobless Claims: After reaching a three-month high in mid-November, claims fell sharply last week, leaving mixed signals about the strength of the labor market.

Friday

•   December Consumer Sentiment (Preliminary)

Earnings Reports

Monday

•   GitLab (GTLB): Last quarter, the company announced GitLab 16.0, which included Value Stream Dashboards and AI-powered code suggestions.

Tuesday

•   Dave & Buster’s (PLAY) and AutoZone (AZO): In its last earnings, AutoZone reported a double-digit increase in earnings as it continued to expand its business internationally.

Wednesday

•   Food Companies: Campbell Soup (CPB), United Natural Foods (UNFI), and Chewy (CHWY).

•   Other Companies: C3.ai (AI), ChargePoint (CHPT), GameStop (GME). At the end of September, the founder of Chewy, Ryan Cohen, was named CEO of Gamestop.

Thursday

•   Dollar General (DG), Lululemon (LULU), DocuSign (DOCU), and Broadcom (AVGO): In late August, Lululemon reported an 18% increase in sales, including a 61% increase in China.

Friday

•   There are no major earnings reports scheduled.

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