- It’s a big week for the stock market, with a slew of economic data scheduled for release.
- Investors are keeping an eye on the Fed’s press conference, April jobs report and quarterly results.
- Here are five key events to watch this week, according to Chief Investment Officer Raymond James:
This will be a big week for the stock market as investors brace for a slew of economic data and corporate earnings.
Raymond James Chief Investment Officer Larry Adam highlighted the top five stocks to watch this week that could have a big impact on stock market prices.
From corporate earnings to April jobs data, here’s what to watch over the next five days, Adam said.
1. “Mr. Powell’s press conference could set off fireworks.”
Federal Reserve Chairman Jerome Powell is scheduled to speak as part of the Fed’s May FOMC meeting on Wednesday at 2:30 p.m.
The Fed is largely expected to keep interest rates on hold, but Powell could provide clues as to whether he will be hawkish or dovish about future rate cuts. Investors are starting to get nervous after a series of hotter-than-expected inflation reports, with the Fed on alert about the possibility of a rate cut.
“Chairman Powell likely stuck with his ‘data dependent’ scenario, reiterating that interest rates are likely to have peaked but may need to remain restrictive for a little while longer.” , Chairman Powell will need to get past this week’s issues with slowing growth and rising inflation.” Will the three interest rate cuts included in the GDP report and in the March dot plot still make sense? Please,” Adam said.
Chairman Powell may also provide more details about the Fed’s balance sheet reduction plans, which could impact stock prices.
2. “Quarterly refund announcements are attracting attention.”
The Treasury is expected to announce next quarter’s borrowing requirements on Monday, as well as details on the mix of Treasury bills and coupons.
This year’s surge in tax revenues has left the Treasury’s operating account “flush with cash” at $955 billion. This suggests that the Treasury will not need to issue large amounts of new debt this quarter, which the market will welcome.
“Good news: Investor appetite for U.S. Treasuries remains healthy. Bad news: There is still enough net supply of Treasuries left for the market to absorb to cover the ongoing deficit of about $2 trillion. “There is,” Adam explained.
3. “Will earnings growth help it continue rising?”
This week is one of the busiest for earnings reporting, with more than 170 S&P 500 companies scheduled to report their first-quarter results this week. The largest companies reported included Amazon on Tuesday and Apple on Thursday.
So far, S&P 500 earnings are on track to increase about 1.6% from a year ago, with most of the increase coming from supercap tech companies. Investors will be listening intently to advice from corporate CEOs as focus shifts to the rest of the year.
“Valuations are trading near the high end of the 20-year range, so gains need to be the catalyst to push the market up from current levels,” Adam said.
4. “Are manufacturing and service activities improving?”
ISM manufacturing statistics released last month showed a surprising jump into expansionary territory for the first time since October 2022. New data from the index will be released on Wednesday, with the economic expansion expected to continue into its second month. Meanwhile, ISM Services data will be released on Friday and is expected to continue expanding for the 15th consecutive month.
“This is important because services make up a larger share of the economy than manufacturing,” Adam said. “Overall, these numbers reflect an economy that is expanding, albeit at a slower pace.” Stated.
5. “Will the labor market remain resilient?”
Finally, investors are keeping an eye on the April jobs report, which will be released on Friday. The median economist forecast is for 250,000 jobs to be added to the economy. Also, if the unemployment rate stays below 4%, it will tie for the second-longest consecutive streak below 4% in history.
However, there are signs of a slowdown in the job market.
“ISM manufacturing and services employment subsector statistics are both in contraction territory, with job openings near the lowest levels since March 2021. Employment statistics provide the latest information on the strength of the labor market. Deaf,” Adam said.
