Last week, we saw a mixed bag of activity in the indices. While the Nasdaq, S&P, and Dow were all up between 0% and 1.5%, the Russell was down nearly 2% week-over-week. These mixed signals in the market were primarily driven by uncertainties in the job market. This past week, some key employment reports missed expectations considerably. However, this coming week will undoubtedly be a bit more volatile as we see some critical economic data releases and the Q1 earnings season kicks off.
As we mentioned before, some key employment indicators missed expectations by a considerable margin. In terms of job openings, we saw 9.9 million, compared to expectations of 10.5 million and a previous reading of 10.6 million. We also saw the ADP employment report miss expectations, with 145,000 jobs added in March, compared to an expected 261,000 and February’s 242,000. Lastly, we saw a slight on the U.S. employment report, with 236,000 jobs added, compared to an expectation of 238,000 and last month’s 326,000.
The misses in employment metrics across the board have led many to believe that we will face a recession in the coming months as companies begin to pull back hiring and lay employees off.
This week, we will see some significant economic data releases, starting on Wednesday, with CPI data. It will be interesting to see what the data says, as there have been some signs of inflation ticking back up slightly. If inflation does tick up a bit in the report, the markets will undoubtedly react negatively, assuming the Fed will continue increasing interest rates.
We also have PPI data being released on Thursday, which will be essential to helping us understand how companies have been faring amidst Q1’s turbulent economic conditions. Lastly, on Friday, we’ll hear retail sales metrics, which will be pivotal in understanding how the consumer is spending their money.
In addition to some significant economic data releases, Q1 earnings season will be kicking off this week, with some of the most influential companies in the world reporting their earnings, such as:
04/11 – Albertsons Companies (ACI), CarMax (KMX)
04/13 – The Progressive Corporation (PGR), Fastenal Company (FAST), Delta Air Lines (DAL)
04/14 – UnitedHealth Group (UNH), JP Morgan Chase (JPM), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK), Citigroup (C), PNC Financial Services (PNC)
While ACI, KMX, and DAL will help us understand how consumers are spending their money, all eyes will be on the banks this week. Some of the largest banks and investment managers will be reporting their earnings on Friday. Listening to what the CEOs of JPM, WFC, BLK, and C have to say about the current banking landscape will be pivotal. Wall Street will certainly be making moves in accordance to the guidance they give and the commentary they provide.
Monitoring the market conditions this week.
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