Week Ahead on Wall Street: The Fed, Jobs, and Earnings

What’s Next for the Fed?

It’s Fed week! And jobs week to boot! Investors will have plenty to look out for as this week unfolds.

Economists and investors have been debating when the U.S. economy would finally weaken, with the scenario always a quarter or two in the future. Yet the economy has continued to surprise on the upside and beat expectations. So now the question is whether that slowdown will come at all.

Data releases continue to highlight the strength of the U.S. economy, culminating in the fourth quarter growth rate of Gross Domestic Product — the broadest measure of economic activity — which came in significantly above consensus expectations. On top of that, the Fed’s preferred inflation measure — core PCE — came down to a 2%-handle in December, stirring more excitement about the prospect of a possible soft landing.

So what does this mean? All roads lead to the Federal Reserve it seems. The central bank is expected to leave interest rates unchanged at Wednesday’s FOMC meeting, but investors will probably focus on any hints about the future.

But the week’s high profile agenda doesn’t start and end on Wednesday: On Friday, the January job report is due. In the month prior, jobs added exceeded expectations and the unemployment rate remained unchanged at 3.7%, marking nearly two years of unemployment under 4%. All this will be happening during a busy week in the earnings season, with over 100 companies set to report results, including most of the mega-cap tech behemoths.

With the data as compelling as it has been, it’s anyone’s best guess what the Fed ultimately decides to do and how the economy will evolve next.

Economic Data and Earnings Reports

Monday

•   January Dallas Fed Manufacturing Activity: This is the Dallas Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

•   Earnings: Alexandria Real Estate Equities (ARE), Franklin Resources (BEN), F5 (FFIV), Nucor (NUE), and Whirlpool (WHR).

Tuesday

•   November FHFA House Price Index: This is a broad measure of single-family house prices released by the Federal Housing Finance Agency.

•   November S&P CoreLogic Case-Shiller Home Price Index: This is a private sector measure of national home prices. The index returned to growth in 2023 after trending lower at the end of 2022.

•   January Conference Board Consumer Confidence: How consumers feel about economic conditions may affect their spending habits. This survey places a particular focus on the job availability and the state of the labor market.

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

•   January Dallas Fed Non-Manufacturing Activity: This is the Dallas Fed’s survey of services executives in the region on business conditions and their outlook.

•   Earnings: Advanced Micro Devices (AMD), A. O. Smith (AOS), Boston Properties (BXP), Chubb (CB), Danaher (DHR), Electronic Arts (EA), Equity Residential (EQR), Corning (GLW), General Motors (GM), Alphabet (GOOGL), HCA Healthcare (HCA), Hubbell (HUBB), Johnson Controls International (JCI), Juniper Networks (JNPR), Mondelez International (MDLZ), Marathon Petroleum (MPC), MSCI (MSCI), Microsoft (MSFT), Match Group (MTCH), NVR (NVR), Pfizer (PFE), PulteGroup (PHM), Pentair (PNR), Robert Half (RHI), Starbucks (SBUX), Skyworks Solutions (SWKS), Stryker (SYK), Sysco (SYY), Teradyne (TER), and United Parcel Service (UPS).

Wednesday

•   FOMC Interest Rate Decision: The Federal Reserve will announce any changes to monetary policy after the conclusion of its two-day FOMC meeting, in addition to providing commentary on the economy. It’s one of eight regularly scheduled meetings per year.

•   January ADP Employment Report: Thissurvey by ADP, often released a day or two before the official government jobs report, offers insight into private sector employment trends.

•   Q4 Employment Cost Index: This is the most comprehensive measure of worker compensation, including wages, bonuses, benefits and more.

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

•   Earnings: Automatic Data Processing (ADP), Aflac (AFL), Align Technology (ALGN), Aptiv (APTV), AvalonBay Communities (AVB), Avery Dennison (AVY), Boeing (BA), Boston Scientific (BSX), CH Robinson Worldwide (CHRW), Cencora (COR), Corteva (CTVA), Fortive (FTV), Hess (HES), Mastercard (MA), MetLife (MET), MarketAxess Holdings (MKTX), Nasdaq (NDAQ), Old Dominion Freight Line (ODFL), Otis Worldwide (OTIS), Phillips 66 (PSX), PTC (PTC), QUALCOMM (QCOM), Qorvo (QRVO), Rockwell Automation (ROK), Roper Technologies (ROP), and Thermo Fisher Scientific (TMO).

Thursday

•   Q4 Productivity and Unit Labor Costs: These measures provide a breakdown of how productive workers were per hour of work and at what cost.

•   January ISM Manufacturing PMI: This index, released by the Institute for Supply Management, tracks how purchasing managers across different industries feel about the business environment.

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

•   January 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 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: Apple (AAPL), Amazon (AMZN), Ball Corporation (BALL), Becton Dickinson and Company (BDX), Broadridge Financial Solutions (BR), Cardinal Health (CAH), Clorox (CLX), CMS Energy (CMS), Camden Property Trust (CPT), Quest Diagnostics (DGX), Dover (DOV), Eastman Chemical (EMN), Eaton (ETN), Gen Digital (GEN), Huntington Ingalls Industries (HII), Hologic (HOLX), Honeywell International (HON), International Paper (IP), Illinois Tool Works (ITW), Microchip Technology (MCHP), Meta Platforms (META), Altria Group (MO), Merck & Co. (MRK), Parker-Hannifin (PH), Royal Caribbean Cruises (RCL), Revvity (RVTY), Stanley Black & Decker (SWK), Bio-Techne (TECH), Tractor Supply Company (TSCO), Trane Technologies (TT), WEC Energy Group (WEC), and WestRock (WRK).

Friday

•   January Employment Situation Summary: This blockbuster release from the Labor Department is released once a month and gives a comprehensive look at employment, wages, and hours worked.

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

•   Earnings: AbbVie (ABBV), Aon (AON), Bristol-Myers Squibb (BMY), Cboe Global Markets (CBOE), Church & Dwight Co (CHD), Charter Communications (CHTR), Cigna (CI), Chevron (CVX), W. W. Grainger (GWW), Hartford Financial Services (HIG), LyondellBasell Industries (LYB), Regeneron Pharmaceuticals (REGN), and Exxon Mobil (XOM).

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