Week Ahead on Wall Street: Data Crosscurrents

Will the Real Economy Please Stand Up?

Navigating the current market environment has become increasingly complex. It was only a few weeks ago that the Federal Reserve delivered a big interest rate cut, but since then economic indicators have sent mixed signals. That has left investors and policymakers puzzled.

For one, inflationary pressures haven’t completely abated, with the most recent reading of the consumer price index exceeding expectations, raising some concerns about whether the Fed erred by lowering interest rates as much as they did in September. Labor market signals have also been pretty mixed. On one hand, the monthly jobs report showed lower unemployment, more jobs added than expected, and above-consensus wage growth. On the other hand, jobless claims surged last week, hinting at a possible deterioration in the labor market.

As if that wasn’t enough, recent union strike activity and Hurricane Helene could temporarily skew jobs data, making it harder to get an accurate read on what’s going on. For example, while initial jobless claims were likely affected by Hurricane Helene (claims rose by 12,376 in North Carolina and Florida), claims in Michigan also rose by 10,667. Making matters worse, Hurricane Milton hit Florida right after, disrupting economic activity and likely skewing the data even further.

The confluence of events (right before a presidential election, which itself usually increases business uncertainty) makes it hard to assess the underlying state of the economy. In light of these circumstances, determining the appropriate course of action can be daunting, both for Fed officials and investors. It’s why Atlanta Fed President Raphael Bostic suggested that the Fed could keep interest rates unchanged in November and instead give the data more time to work itself out. For investors, that might mean some choppiness as focus shifts from the macro environment to corporate earnings.

Economic and Earnings Calendar

Tuesday

• October Empire State Manufacturing Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

• September New York Fed Survey of Consumer Expectations: This is a measure of peoples’ expectations for inflation, jobs prospects, earnings growth, and more.

• September Treasury Statement: This summarizes the U.S. federal government budget by tracking government revenues and expenditures.

• Fedspeak: San Francisco Fed President Mary Daly will give keynote remarks and then participate in a moderated discussion at an NYU Stern event. Fed Governor Adriana Kugler will participate in a moderated discussion on careers in economics.

• Earnings: Bank of America (BAC), Citigroup (C), Goldman Sachs Group (GS), JB Hunt Transport Services (JBHT), Johnson & Johnson (JNJ), Omnicom Group (OMC), Progressive (PGR), PNC Financial Services Group (PNC), Charles Schwab (SCHW), State Street (STT), United Airlines (UAL), UnitedHealth Group (UNH), Walgreens Boots Alliance (WBA)

Wednesday

• October New York Services Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook

• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

• Earnings: Abbott Laboratories (ABT), Crown Castle International (CCI), Citizens Financial Group (CFG), CSX (CSX), Discover Financial Services (DFS), Equifax (EFX), Kinder Morgan (KMI), Morgan Stanley (MS), Prologis (PLD), PPG Industries (PPG), Solventum (SOLV), Steel Dynamics (STLD), Synchrony Financial (SYF), US Bancorp (USB)

Thursday

• September Retail Sales: This measures spending at retail stores and is a key indicator of consumer demand.

• October Philadelphia Fed Manufacturing Activity: The Philadelphia Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

• September Industrial Production and Capacity Utilization: The industrial sector accounts for much of the cyclical swings in economic activity.

• October NAHB Housing Market Index: This index tracks how homebuilders feel about the current and future state of the single-family housing market.

• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

• Fedspeak: Chicago Fed President Austan Goolsbee will give opening remarks at a Chicago Fed event on careers in economics.

• Earnings: Blackstone Group LP (BX), Elevance Health (ELV), Huntington Bancshares (HBAN), Intuitive Surgical (ISRG), KeyCorp (KEY), Marsh & McLennan Companies (MMC), M&T Bank (MTB), Netflix (NFLX), Snap-on (SNA), Truist Financial (TFC), Travelers Companies (TRV)

Friday

• September Building Permits and Housing Starts: Construction data is a leading indicator of economic activity.

• Fedspeak: Minneapolis Fed President Neel Kashkari will moderate the keynote policy panel at the Macroeconomic Policy Perspectives conference series jointly hosted by the Minneapolis Fed, the University of Chicago, and Stanford University. Fed Governor Chris Waller will discuss decentralized finance.

• Earnings: American Express (AXP), Fifth Third Bancorp (FITB), Las Vegas Sands (LVS), Procter & Gamble (PG), Regions Financial (RF), Schlumberger (SLB)

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