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As the first month of the year comes to an end, several economic reports coming this week could be important in setting the tone for the market and the economy. economy Can expect in 2024.
It will contain data on a variety of topics, including home prices, monetary policy, federal government borrowing needs, consumer sentiment and labor market conditions. Enter the earnings reports from most of the Magnificent Seven stocks that have helped drive the market for a year, and there’s a great mix of economic reports. Microsoft, Alphabet (Google), Meta, Amazon and Apple are all due to report this week.
“It will be a big week on the macro front, with the (Federal Reserve) meeting on Tuesday and Wednesday, the Treasury’s latest quarterly refunding announcement, quarterly earnings season in full swing, employment report on Friday and the awaited response from the government. Richard de Chazal, macro analyst at William Blair, said the US bombed a military base, killing three and seriously injuring at least 34.
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It will start on Tuesday with S&P CoreLogic House prices Index for November. Despite being somewhat dated, the index should capture declines in mortgage rates and indicate whether home prices are rising. Expectations are for the average home price to increase by 0.3%.
The day also brings readings on January consumer confidence from the Conference Board. Consumers are expressing a better mood due to low inflation and rising incomes. Economists expect the December numbers to jump.
And then comes the first of a handful of solutions job marketWith job opening numbers from the Department of Labor for December. Openings continue to trend downward and are expected to decline once again to approximately 8.7 million open positions from last month’s number of approximately 8.8 million.
On Wednesday, private payroll firm ADP will release its monthly jobs survey for January. They are expected to gain 148,000 jobs, after beating forecasts for a 164,000 jobs gain in December. But the day will also bring two events that could have a material impact on the markets, especially bonds.
First up is the Treasury Department’s quarterly refund announcement, in which the government intends to release the amount and structure of the debt over the next three months. Interest rates are on the downside due to expectations of softening inflation federal Reserve Whether rates will be low this year, how much the Treasury plans to borrow and whether it leans toward short-term bills or longer-term bonds is important.
Hours after the Treasury announcement, the Fed will also conclude its two-day meeting, the first of 2024, and issue a statement on interest rates. Most observers are expecting no policy changes from the Fed, but a later press conference with Chairman Jerome Powell could give an indication of when rate cuts might begin.
Bill Adams said, “Chair Powell will enter the Fed’s headquarters with a song in his heart and a bounce in his step, as last week’s data release showed that the central bank is on track to meet its target in the second half of 2023. “Both overall and core inflation have slowed.” , chief economist at Comerica Bank. “Despite this, the Fed’s decision on Wednesday will keep the federal funds target unchanged from a restrictive 5.25% to 5.50%, and will likely signal a cautious approach to bringing rates back to more normal levels.”
“The Fed got badly burned in late 2021 and early 2022 when they thought higher inflation would be temporary, only to see it rebound and get worse,” Adams said. “They are determined to avoid making the same mistake twice.”
The week ends with Friday’s monthly jobs numbers for January. After a warmer-than-expected December, with 216,000 jobs created, analysts are expecting a decline of around 180,000, although the trend has surprisingly been upward.
Throughout the week a report on consumer sentiment will be presented by the University of Michigan. The final reading for January is expected to leave consumers feeling cheery about the state of the economy and inflation.
Hanging all this up would be what President Joe Biden would do in response to the killing of American service members by Iranian-backed terrorists in the Middle East. The political atmosphere remains heated, with Congress deadlocked over border negotiations, possible decisions in legal proceedings affecting former President Donald Trump and developments in the 2024 presidential campaign.
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