Week Ahead on Wall Street: Market Fireworks

Possible Surprises

The first week of the month is always a fun one in markets. But with some high profile economic data and a fresh start to a new quarter, we might be in for some fireworks too.

For one, we might get some funky trading. Why? Investors often rebalance their portfolios at certain intervals, and doing it on a quarterly basis is a popular option. This week might be especially funky, as it’s a shortened trading week. Stock and bond markets will close early on July 3 and remain closed for Independence Day on July 4.

Trading will resume on Friday, but let’s be honest: Investors may not be glued to their screens on a summer Friday after a holiday, which could mean lower trading volumes. And that opens the door for more volatility. In short, if there are fewer buyers and sellers on a given day, the differences between stock quotes can be greater. So if a stock was to fall, for example, it may fall more on such a day, than on a regular trading day with more active participants.

That could be meaningful this week considering the raft of jobs data on deck. It will culminate in the June jobs report, published by the Bureau of Labor Statistics on Friday.

Remember: The Federal Reserve has a dual mandate for maximum employment and price stability (i.e. stable inflation). While officials have said that they’ll need several months of inflation data to gain the confidence needed to lower interest rates, the jobs market is a different story. Fed Chair Jerome Powell has indicated that unexpected labor weakening could push the central bank to cut rates sooner. We’re staying tuned.

Economic and Earnings Calendar

Monday

•   June S&P Global US Manufacturing PMIs: This index by S&P Global tracks how purchasing managers across different manufacturing industries feel about the business environment.

•   May Construction Spending: Construction data is a leading indicator of business activity.

•   June ISM Manufacturing PMI: This index from the Institute for Supply Management tracks how purchasing managers across the manufacturing sector feel about the business environment.

Tuesday

•   May Job Openings: A key measure of business demand for labor is the number of job openings, since reducing openings is easier and preferable to layoffs.

•   June 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.

Wednesday

•   Markets close early on July 3.

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

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

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

•   June S&P Global US Services PMI: This index tracks how purchasing managers across different services industries feel about the business environment.

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

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

•   June FOMC Meeting Minutes: The Federal Reserve releases detailed notes of every FOMC meeting three weeks after they took place. Investors often look for more information on Fed officials’ views for hints on the outlook for interest rates and the economy.

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

•   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: Constellation Brands (STZ)

Thursday

•   Markets are closed on Independence Day.

Friday

•   June 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.

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