Investing.com — Friday’s nonfarm payrolls report and Wednesday’s minutes of the Federal Reserve’s June meeting will be the highlights of a holiday-shortened week. The stock markets go into the second half with a tailwind after strong gains in the first six months of the year. The Reserve Bank of Australia is set to make its latest rate decision while PMI data from China is likely to underscore the need for more stimulus measures
1. Nonfarm payrolls
Friday’s will be the main event, with economists expecting the economy to have added 200,000 jobs in June.
In May, the economy added a far larger than forecast 339,000 jobs, although an uptick in the to a seven-month high of 3.7% indicated that labor market conditions were easing.
Signs of continued strength in the labor market could underline a view that has helped boost markets this year: that the U.S. economy can avoid a severe recession despite the Fed’s aggressive tightening.
“The labor market is probably going to end up proving to be the big catalyst for what may happen market-wise and also monetary policy-wise,” Omar Aguilar, chief executive officer and chief investment officer of Schwab Asset Management told Reuters.
Ahead of Friday’s jobs report, markets will get updates on other areas of the labor market with data on private sector hiring from , and weekly unemployment claims.
2. Fed minutes
The Fed on Wednesday is to publish the minutes of its June 13-14 meeting when it held rates steady after 10 straight rate hikes, but indicated that two more increases are coming this year, including one widely expected in July.
On Friday a gauge of inflation that is closely followed by the U.S. central bank indicated that price pressures are cooling, fueling hopes the Fed could be near the end of its rate-hiking cycle.
The minutes should give investors more insight into the debate over what Fed Chair Jerome Powell has said is an increasingly even balance of risks between doing too little and going too far on policy tightening.
In comments last Thursday Powell reiterated that “a strong majority” of Fed policymakers expect they will need to raise interest rates at least twice more by year’s end.
3. Second half gets underway
The U.S. stock market has rallied in the first half of 2023, powering higher despite a crisis in the banking sector and fears over the prospect of a recession.
The has risen 15.9% since the start of the year and the tech-heavy has gained 31.7%, for its biggest first-half increase in 40 years.
“We have had a pretty resilient market in the first half of this year,” Mona Mahajan, senior investment strategist at Edward Jones told Reuters. “The market needs one big question answered, and that is what does the economy look like in the back half of the year.”
Investors are hoping that the strong gains in the first half of the year will give a tailwind to markets going into the second half of the year, but this month will bring several market-moving events – Friday’s jobs report, followed by the start of second-quarter earnings season along with a key inflation report next week ahead of the Fed’s next policy decision on July 26.
4. RBA decision
The Reserve Bank of Australia holds its July policy on Tuesday and markets are unsure of whether it might further raise the 4.1% cash rate or pause to see how past tightening is working.
The RBA has hiked interest rates by a huge 400 basis points in the past year in an attempt to cool demand and curb sky-high inflation.
Resilient data last Thursday suggested some cushion for another rate rise, a day after data showing that inflation slowed sharply in May to its lowest in 13 years saw an aggressive paring of tightening bets.
Prior to that, a blockbuster jobs report mid-month had seen hike bets rise, after getting wound down following surprisingly dovish minutes of the June meeting, showing the decision to raise rates was “finely balanced”.
5. China factory PMI
China is to release the on Monday which will give an update on the strength of the manufacturing sector as the post-COVID economic recovery in the world’s second-largest economy falters.
The data is likely to underscore the need for more stimulus measures amid weak demand both at home and abroad and prop up a weakening currency.
The has lost nearly 5% to the dollar this year, becoming one of the worst-performing Asian currencies.
Widening bond yield differentials between the U.S. and China, fueled by growing monetary policy divergence have pressured the yuan.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
