Key Factors:- Next week’s events include Eurozone unemployment rate, RBA /RBNZ Polcies, Japan Average Cash Earnings etc.

Key Takeaways

Unless Congressional leaders pass last-minute spending packages to keep the government open until Sept. 30, a shutdown is likely.
Next week will bring the August Job Openings and Labor Turnover Survey (JOLTS), ADP’s National Employment data monitoring private sector payrolls, and September’s nonfarm payrolls data.
Next week, Constellation Brands and Levi Strauss report profits.
Unless House leaders pass last-minute spending packages to keep the government open until Sept. 30, a shutdown is likely.
Next week will bring the August Job Openings and Labor Turnover Survey (JOLTS), ADP’s National Employment data monitoring private sector payrolls, and September’s nonfarm payrolls data. Next week, Constellation Brands and Levi Strauss report profits.

Weekly Economic calendar USA

Monday, Oct. 2

S&P Global Manufacturing PMI – Final Reading (September)
ISM Manufacturing PMI (September)
Construction Spending (August)

Tuesday

Job Openings and Labor Turnover Survey (JOLTS) (August)
IBD/TIPP Economic Optimism Index (October)
LMI Logistics Managers’ Index (September)

Wednesday

ADP National Employment Report (September)
S&P Global Services PMI – Final Reading (September)
S&P Global Composite PMI – Final Reading (September)
ISM Services PMI (September)
Factory Orders (August)

Thursday

Challenger, Gray & Christmas Job Cuts (September)
U.S. Trade Balance (August)

Friday

U.S. Nonfarm Payrolls (September)
Consumer Credit Report (August)

TOP FACTORS IN WALL STREET

Job Market Updates

Next week, the August Job Openings and Labor Turnover Survey (JOLTS) on Tuesday will provide labor market developments.

ADP will release its September National Employment Report on Wednesday, monitoring private sector payroll growth.

This will prepare for Friday’s September nonfarm payrolls report.

Despite a strong labor market, the Federal Reserve’s rate hikes have finally slowed hiring, which is still around record highs.

Government shutdown imminent

With no Congressional resolution in sight, the federal government may run out of money after Sept. 30, forcing a shutdown.

Millions of government workers, from air traffic controllers to military troops, would be furloughed or ordered to work without pay in the first shutdown since 2019. A shutdown may limit national parks and impair essential federal aid programs like SNAP.

Goldman Sachs analysts believe that a shutdown may cut GDP growth by 0.2 percentage points every week, but growth might recover after a settlement and government reopening. Federal pay accounts for 2% of U.S. GDP and would be significantly cut in a shutdown.

Bureau of Economic Analysis (BEA), Bureau of Labor Statistics (BLS), and U.S. Census Bureau would also close, leaving Federal Reserve policymakers without critical data to guide monetary policy decisions before the Oct. 31 Federal Reserve Open Markets Committee meeting.

ISM Manufacturing PMI in the United States

The US ISM Manufacturing PMI is projected to rise to 47.7 from 47.6 previously. As a reminder, the S&P Global US Manufacturing PMI surpassed forecasts, while it remains in contraction, and the remarks overall hint to activity stagnation.

Nonfarm payroll
Friday will bring a carefully watched September employment report from the U.S., with economists estimating 163,000 new jobs, down from 187,000 in August.
A stronger-than-expected number might reinforce the Fed’s ‘higher for longer’ approach, dragging on markets.
Tuesday’s JOLTS employment report for August and the ADP National Employment report’s private sector hiring update are expected to moderate jobs growth before Friday’s report.
On Monday, the Institute for Supply Management will report its September manufacturing PMI, which is predicted to continue in contraction for an eleventh month. The ISM services PMI on Wednesday is expected to show slower growth.

Powell speech

Jay Powell and Philadelphia Fed President Patrick Harker will have a roundtable discussion with employees, small business owners, and community leaders on Monday.
On Friday, annual underlying inflation fell below 4% for the first time in over two years, but rising oil prices, which raise gas prices, signal the Fed’s 2% inflation target will be hard to reach.
The Fed left rates on hold in September but remains optimistic about one more rate hike this year and fewer cuts next year.
During the week, Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, and San Francisco Fed President Mary Daly will appear.

Equity markets start Q4.
The crucial fourth quarter begins following a dismal third quarter for stocks.

The Dow plummeted 2.6%, the S&P 500 3.6%, and the Nasdaq 4.1% for the quarter. The S&P 500 lost 4.9%, Dow 3.5%, and Nasdaq 5.8% in September.
Rising bond yields are shaking stock markets, and some investors think megacap company valuations like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) may be another weak spot.
Tech and growth stocks, which frequently have high profit growth expectations, are affected harder when yields rise because their future earnings are discounted more severely.
Q4 earnings season is coming up, and while the AI surge certainly counts, there are uncertainties about its eventual profit gain.

Lagarde speech

After statistics on Friday showed Eurozone inflation fell to its lowest level in two years last month, ECB president Christine Lagarde will speak on Wednesday. Investors will be looking for signs on interest rates.
The data reinforced hopes that the ECB has hiked rates enough to lower inflation to 2%.
Due to rising energy prices, post-pandemic supply chain issues, and excessive government expenditure, bloc inflation briefly reached double digits last autumn.
After a decade of ultra-easy monetary policy to boost inflation, the ECB raised interest rates to a record 4.0% from minus 0.5% in just over a year.

RBNZ, RBA meetings

Tuesday will be the inaugural meeting under new governor Michele Bullock, the first woman to lead the Reserve Bank of Australia.
After service sector price pressures, investors will be eyeing whether the RBA is done raising rates or if more are coming. Everyone agrees to pause.
The Reserve Bank of New Zealand will convene its latest policy meeting on Wednesday. Despite the RBNZ’s hawkish tone, market watchers are not expecting a rate hike. Instead, they are watching for a November signal.

US Job Openings

The US Job Openings report will be one of the most important releases this week, as the previous month’s large miss triggered some major market changes due to the concentration on labor market data. The consensus forecasts 8.83 million job openings in August, up from 8.827 million in July.

US ADP

The ADP report from the United States is a labor market study, and as such, it has the power to affect markets. The consensus predicts that 160K jobs will be added in September, down from 177K the previous month.

ISM Services PMI in the United States

The US ISM Services PMI is predicted to fall to 53.6 from 54.5 previously. The latest S&P Global US Services PMI fell short of expectations, but the index remained in expansion territory. Again, the comments indicated dwindling demand and activity.

Jobless Claims in the United States

The US Jobless Claims data remains one of the most important weekly releases, as the attention has shifted to the labor market. Last week, the data outperformed forecasts once more, indicating that the labor market is still strong for the time being. There is currently no consensus, but keep an eye on it because it is a significant labor market report.

Unemployment in the United States

The US NFP is predicted to show 163K jobs added in September, down from 187K in August, and the unemployment rate will fall to 3.7% from 3.8% in August. The average hourly earnings will also be a significant measure to monitor, with yearly growth of 4.3% vs. 4.3% previously and monthly growth of 0.3% vs. 0.2% previously. Also, keep an eye out for changes as past months continue to be reduced downward.

Weekly Global Market Calendar (18 Sep-22 Sep)

Monday October 2

BoJ Summary of Opinions
Swiss Retail Sales
Eurozone Unemployment Rate
US ISM Manufacturing PMI

Tuesday, October 3

RBA Policy Decision
Swiss CPI
US Job Openings

Wednesday, October 4

RBNZ Policy Decision
Eurozone Retail Sales
Eurozone PPI
US ADP
US ISM Services PMI

Thursday, October 5

US Challenger Job Cuts
US Jobless Claims

Friday, October 6

Japan Wage data
Swiss Unemployment Rate
US NFP
Canada Jobs report

Day-Wise Events in details

Monday 2 October

Unemployment in the Eurozone

The Eurozone unemployment rate is anticipated to stay at 6.4%. The labor market remains tight, and central banks would want to see it ease in order to have more confidence in meeting their inflation targets on time and in a sustainable manner.

ISM Manufacturing PMI in the United States

TUESDAY OCT 3

RBA

The RBA is likely to maintain the cash rate at 4.10%. The RBA predicted that headline inflation will rise in Q3 due to increasing energy prices and warned that the labor market could be approaching a tipping point. Indeed, the recent labor market report was underwhelming, with the majority of new positions being part-time, and the latest monthly CPI showing a rise in headline inflation while the Core measure fell.

Vacancies in the United States

WEDNESDAY OCT 4

RBNZ

The RBNZ is likely to maintain the Official Cash Rate at 5.50%. As stated in the most recent policy statement, the central bank is optimistic that with current interest rates, inflation will return to goal, and it is prepared to see some strength in the data in the near term.

US ADP

ISM Services PMI in the United States

THURSDAY OCT 5

Jobless Claims in the United States

FRIDAY OCT 6

Japan Average Cash Earnings Year on Year

The Japanese wage statistics will be critical for the Bank of Japan, as the central bank has repeatedly stated that it needs to see substantial pay growth in order to be confident in their ability to reach their inflation objective and, as a result, exit from monetary easing. Notably, the data has been going downward in recent months.

Unemployment in the United States

EARNINGS CALENDAR

Tuesday, OCT 3

McCormick & Company (MKC),

Cal-Maine Foods Inc. (CALM),

Novagold Resources Inc. (NG)

Wednesday, OCT 4

RPM International Inc. (RPM),

Acuity Brands Inc. (AYI),

Helen of Troy Ltd. (HELE)

Thursday, OCT 5

Constellation Brands (STZ),

Lamb Weston Holdings (LW),

ConAgra Brands (CAG)

Levi Strauss & Co. (LEVI)

For details

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Key Factors for the week ahead: Fed Speech, looming government shutdown, Job Openings and Labor Turnover Survey (JOLTS). Oct 2-6