Last week, the stock ended a strong first quarter. This week's jobs report will help determine whether this momentum continues.
The S&P 500 (^GSPC) is up more than 10% in the first three months of the year, its best start since 2019. Meanwhile, the Nasdaq Composite Index (^IXIC) rose over his 9%, and the Dow Jones Industrial Average (^DJI) rose about 5.5% during this period.
Latest information on the labor market will focus on the first business week of the new quarter.New statistics on job postings and wage data will herald the biggest jobs report yet This week's headlines: March employment statistics due Friday morning. Updates on activity in the service and manufacturing sectors of the economy are also published in the economic calendar.
On the corporate side, the results of a pivotal shareholder vote in the proxy battle between Disney and activist investor Nelson Peltz are expected to be announced on Wednesday, unless the two sides reach an agreement in advance. This is a hypothetical case.
labor market report card
Personal consumption expenditures (PCE), which excludes energy and food, the Fed's preferred measure of inflation, rose 0.3% in February from the previous month.
San Francisco Federal Reserve Chairman Jerome Powell said at a San Francisco Fed meeting that the outlook is “in line with the direction we want to see” and that the job market and economy are currently strong. Stated. “That means there's no need to rush to cut back,” he said.
Over the coming week, the focus will shift to whether this economic profile holds true. With the Federal Reserve pledging to keep rates high until it confirms its confidence, the focus is on the labor market, and economic data remains resilient, with economists saying inflation will continue to rise without the economy slipping into recession. We expect it to potentially drop to 2%.
March jobs report is expected to show job losses added 216,000 nonfarm payrolls to the U.S. economy last month. That fell to 3.8%, according to Bloomberg data. The U.S. economy added 275,000 jobs in February, and the unemployment rate reached 3.9%.
And many economists don't expect to see any signs of cracks in the strong labor market story.
“With Friday's jobs report, we expect the jobs report to continue the strong momentum of the past few months,” Jefferies' economics team, led by Thomas Simmons, said in a research note Thursday. “Although the recent revisions are extreme and the pay structure is less positive than in 2023 as a whole, we do not see enough evidence in the surrounding labor market data to argue that employment growth will fall off a cliff.” . ”
notable battle
The fate of the Disney (DIS) board will be decided this week following a months-long battle to overhaul the board by activist investor Nelson Peltz. Investors will find out Wednesday whether he won.
The results of the shareholder vote will be announced at the entertainment giant's annual general meeting.
As Yahoo Finance's Alexandra Canal reports, this is a critical moment for Disney as the company steers consumers away from traditional cable packages to streaming services that are barely profitable. The company also faces succession issues as CEO Bob Iger's contract expires at the end of 2026.
Mr. Peltz is seeking board seats for himself and former Disney chief financial officer Jay Laszlo. Mr. Peltz's hedge fund, Trian Fund Management, has a lucrative holding of $3 billion in Disney common stock.
Rally may need some “digestion”
Last week, we noted that some signs of investor sentiment indicate there may be more room for risk to flow into the market.
But other indicators suggest the market's surge may soon be coming to an end.
The Levkovich index, which uses 11 different inputs to measure investor sentiment, has entered “euphoria” for the first time in this bull market, Citi's equity strategy team said in a research note on Thursday.
Scott Kronert, U.S. equity strategist at Citi, wrote in a note to clients that the index sparked the euphoria after, among other things, increased margin debt and market short-selling activity, which pushed the index higher. This trigger typically matches with lower probability. Above-average returns, according to Chronert. But he cautioned that the index was “not designed as a short-term timing tool.”
“Catalysts may still be needed to slow growth,” Kronert wrote. “Maybe I'm not tired enough.”
Kronert told Yahoo Finance that the index has shown that sentiment has become much more constructive in recent months amid the bull market, and that a period of market “digestion” could be expected soon. He said it was sexual.
“I have to admit that I'm kind of following an emotion,” Kronert said. “We're definitely seeing FOMO, fear of missing out, and dynamic situations in the flow data. And we're now trying to find a little bit more balance in how aggressive we can be. .”
He added: “This is not the end of the big story. We just need to respect that it takes some time for fundamentals to develop into price action.”
weekly calendar
Monday
Revenue: PVH (PVH)
Economic data: S&P Global US Manufacturing PMI, March, final value (previously 52.4). Construction spending in February compared to the previous month (estimated 0.5%, -0.2% last time). ISM manufacturing industry, March (forecast 48.5, previous 47.8)
Tuesday
Revenue: Cal-Maine Foods (CALM), Dave and Buster's (PLAY), Paychex (PAYX)
Economic data: JOLTS job openings, February (previously 8.87 million). Factory orders for February (1.0% expected, -3.6% last time). Durable goods orders, February final value (previous +1.4%)
Wednesday
Revenue: BlackBerry (BB), Levi's (LEVI), Sportsman's Group (SPWH)
Economic data: MBA home loan applications, week ending March 29 (previously down 0.7%). Change in the number of ADP employees in March (estimated 150,000, previously 140,000). S&P Global US Services PMI, March, last value (previously 51.7). S&P Global US Composite PMI, March, last value (previously 52.2). ISM Services, March (expected 52.6, previous 52.6)
Thursday
Revenue: Conagra (CAG)
Economic data: Challenger job cuts in March compared to the same month last year (up 8.8% last time). Weekly new unemployment claims, March 30 (previously 210,000)
Friday
Revenue: No significant profits
Economic data: Number of non-agricultural employment in March (forecast +216,000 people, previous +275,000 people). Unemployment rate for March (expected 3.8%, previously 3.9%). Average hourly wage in March compared to the previous month (forecast +0.3%, previous +0.1%). Average hourly wage in March compared to last year (4.3% increase last time). Average weekly working hours in March (estimated to be 34.3 hours, previously 34.3 hours). Labor force participation rate, March (previously 62.5%)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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