What to Expect in the Week Ahead (LEVI and AZZ Earnings; Jobs and the Fed)

Moomoo Breakfast US wrote a column · Jul 3, 2023 08:43

What to Expect in the Week Ahead (LEVI and AZZ Earnings; Jobs and the Fed)

Modest daily stock gains cinched a strong six months on Wall Street, fueled by investors' optimism that inflation is easing while the economy continues to hum. Fresh spending data added momentum on Friday, showing milder core-price increases in May compared with a month earlier, while consumer outlays continued to rise. The data lifted major stock indexes on a day of calm trading, rounding out the $Nasdaq Composite Index (.IXIC.US)$ 's best first half of a year in four decades.

More recently, the year's stock rally -- at first concentrated among a small handful of huge technology companies -- has shown signs of broadening. All 11 of the S&P 500's industry sectors gained ground in June.

$Constellation Brands (STZ.US)$, which sells Modelo and Corona beer, also said Friday that higher costs weighed on profits even as sales improved. Shares slid 0.3%.

Makers of physical stuff such as $Nike (NKE.US)$ "had their day in the sun during the pandemic, but now the pent-up demand is going to services," he said.

A 2.3% gain lifted $Apple (AAPL.US)$'s market capitalization above $3 trillion, the first time a company has ended a trading day worth so much.

Earnings will include results from $Nurix Therapeutics (NRIX.US)$ on Monday, $Trilogy Metals (TMQ.US)$ on Tuesday, $Albertsons Companies (ACI.US)$ on Wednesday, $Levi Strauss & Co. (LEVI.US)$ on Thursday, and $AZZ Inc (AZZ.US)$ on Friday.

The highlights will be the latest data on the U.S. labor market. On Thursday, the Bureau of Labor Statistics will releases the Job Openings and Labor Turnover Survey. Economists' consensus call is for 10 million job openings on the last business day of May, which would be down slightly from April.

Then it will be Jobs Friday. The BLS is expected to report a gain of 240,000 nonfarm payrolls in June, following an increase of 339,000 in May. The unemployment rate is forecast to hold steady at 3.7%. Average hourly earnings are seen rising 0.3% month over month, matching May's pace.

Other releases this week will include the minutes from the Federal Open Market Committee's mid-June monetary-policy meeting on Wednesday. The Institute for Supply Management releases its Manufacturing Purchasing Managers' Index for June on Monday and the Services equivalent on Thursday.

Monday 7/3

The Nasdaq and New York Stock Exchange have shortened regular trading hours, ending at 1 p.m.

The Institute for Supply Management releases its Manufacturing Purchasing Managers' Index for June. Economists forecast a 46.3 reading, roughly even with the May data. The index has had seven straight readings below 50, indicating the U.S. is in a manufacturing recession. But continued strength in the services sector has lifted the overall economy up.

Tuesday 7/4

Equity and fixed-income markets are closed in observance of Independence Day.

Wednesday 7/5

The Federal Open Market Committee releases the minutes of its mid-June monetary-policy meeting.

Thursday 7/6

ADP releases its National Employment Report for June. Economists see a gain of 220,000 private-sector jobs, following a 278,000 increase in May. The leisure and hospitality sector continues to lead gains while manufacturing and finance shed workers in May.

The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey. The consensus call is for 10.1 million job openings on the last business day of May, slightly less than in April. Despite falling by nearly two million from the peak of 12 million in March 2022, job openings remain historically elevated. There are currently 1.65 job openings for every unemployed person, and Federal Reserve Chairman Jerome Powell has stressed that he would like to see that ratio approaching 1:1.

The ISM releases its Services PMI for June. Expectations are for a 51.1 reading, a tick higher than the May figure. The index has had only one reading below the expansionary level of 50 in the past three years.

Friday 7/7

The BLS releases the jobs report for June. The consensus estimate is for the economy to add 240,000 nonfarm payrolls, after a 339,000 increase in May. The unemployment rate is seen remaining unchanged at a historically low 3.7%. Jobs growth has surprised to the upside nearly every month in the past year, sometimes by more than double estimates, as in January.

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