The week ahead for investors July 3, 2023

Dive into this week’s key financial happenings with our succinct, easy-to-understand summaries of the most crucial economic events. Designed to keep you up-to-date, our roundup empowers you to navigate the week ahead and seize unfolding opportunities

Key Points:

In the upcoming week, investors will face a shortened trading period due to Independence Day. However, this week is still packed with key economic updates:

• Release of important labor market indicators: The JOLTS and ADP’s National Employment Report.
• PMI readings from S&P Global and the Institute for Supply Management (ISM).
• The Federal Reserve’s policy meeting minutes publication.

In the week to come, investors will be navigating a shortened trading period due to the Independence Day holiday, with the US markets taking a pause on Tuesday. Nevertheless, the shortened week won’t be short of key economic updates. Highlighting the week will be the release of important labor market indicators, including the Job Openings and Labor Turnover Survey (JOLTS) and ADP’s National Employment Report, set to be revealed on Thursday. These reports pave the way for the eagerly awaited nonfarm payrolls data on Friday, which provides an overview of job growth in June.

Additionally, investors will be presented with the PMI readings from S&P Global and the Institute for Supply Management (ISM), offering insights into the manufacturing sector’s performance. Furthermore, the Federal Reserve’s recent policy meeting minutes are set to be published, shedding light on the monetary policy’s current direction.

Week’s Highlight Events:

• Market closure on Tuesday due to Independence Day.
• Release of key labor market indicators including the JOLTS, ADP’s National Employment Report, and June’s nonfarm payrolls report.
• Release of Federal Reserve’s policy meeting minutes.

Key Events Calendar:

• Monday, July 3:
  • S&P Global Manufacturing PMI
  • ISM Manufacturing PMI
  • Construction Spending for June
  • Sigma Lithium Corporation (SGML) releasing earnings
  • Note: U.S. markets will close early at 1:00 pm ET.
• Tuesday, July 4:
  • U.S. markets remain closed in observance of Independence Day.
• Wednesday, July 5:
  • May Factory Orders
  • IBD/TIPP Economic Optimism Index for July
  • FOMC Meeting Minutes are scheduled.
• Thursday, July 6:
  • Earnings from Coca-Cola Europacific Partners (CCEP) and Levi Strauss & Co. (LEVI)
  • U.S. Trade Balance for May
  • Challenger Job Cuts for June
  • ADP National Employment Report for June
  • JOLTS Report for May
• Friday, July 7:
  • U.S. Nonfarm Payrolls for June will be released.

Key Insights:

A crucial focus for the week will be the labor market reports. The JOLTS report for May, which tracks job openings, hires, quits, and separations, is anticipated to reflect a slight decline in job openings from 10.1 million in April to 9.9 million. The ADP National Employment Report for June, slated for Thursday, is expected to display a growth of 180,000 in private sector payrolls. Friday’s nonfarm payrolls report is anticipated to show a deceleration in job growth with a projected addition of 200,000 jobs in June, down from the previous month’s gain of 339,000. The unemployment rate is expected to hold steady at 3.7%. Any outperformance in these numbers could support the Federal Reserve’s argument for further rate hikes to manage economic heat and inflation.

Moreover, the Federal Reserve’s meeting minutes from the latest FOMC meeting will be published on Wednesday. Given the ten consecutive rate hikes since March last year, these minutes will be scrutinized for any clues about future policy direction. Current market projections suggest a high probability of a further hike by 25 basis points in the upcoming July policy meeting, which could push the federal funds rate to its highest in 22 years.

All these developments, packed in a shortened week, provide investors plenty to ponder over as they navigate the week’s potential challenges and opportunities.