Investing.com — This is shaping up to be a busy week with U.S. jobs data, Federal Reserve minutes, several Fed speakers, and inflation data for the Eurozone and China. Meanwhile, U.S. markets will remain closed on Thursday in commemoration of former President Jimmy Carter. Let’s see what happens in the market over the next week.
job report
Friday’s jobs report is expected to show the U.S. economy added jobs in December, while the unemployment rate is expected to hold steady at 0.5%.
Labor market data has been volatile in recent months due to disruptions caused by strikes and hurricanes. The number of employees rose by 227,000 in November, a recovery from the slow increase seen in October.
Investors have barely priced in two rate cuts by the Fed this year, and the data is likely to coincide with a mildly slowing but still robust labor market.
Ahead of Friday’s report, investors will get other updates on the strength of the labor market. The United States is scheduled to release monthly statistics on job openings on Tuesday, followed by jobs statistics and weekly reports on Wednesday, one day ahead of Memorial Day on Thursday.
Fed minutes, speakers
On Wednesday, the Federal Reserve is scheduled to release a report on its December meeting, which led to the decision to cut rates by three consecutive 25 basis points in what Chairman Jerome Powell described as a “close call.”
“Given Chairman Powell’s description of the meeting and Mr. Hammack’s dissent in Cleveland, the minutes should not detail disagreements about appropriate conduct at the meeting,” Deutsche Bank analysts said in a note. “Is that so?” he said. “We also look for clues about how officials have factored upcoming fiscal, trade, and immigration policy changes into their forecasts.”
Investors will also have the opportunity to hear from several Fed officials this week, with talks by Governor Cook and Governor Waller on Monday and Wednesday, respectively, likely to be highlights. Richmond Fed President Thomas Barkin and Philadelphia Fed President Patrick Harker are also scheduled to speak.
stock market
After a strong year, stock prices slumped in late December and early January. The benchmark ended 2024 up 23%, marking its biggest two-year gain since 1997-1998.
A third consecutive outstanding year will depend in part on the strength of the economy, and one of the most important indicators of economic health is labor market data.
The data also provides clarity on the outlook for interest rates after the Fed spooked markets last month by raising its 2025 inflation expectations and making the outlook for rate cuts more cautious. may also be helpful.
Investors are wary that the jobs report reveals an overly strong economy, with a resurgence in inflation under the incoming Trump administration seen as one of the key risks to markets early in the year.
inflation data
Hopes for further interest rate cuts from the European Central Bank will be tested by the release of December euro zone inflation data on Tuesday. And inflation statistics are expected to be released on Monday.
Any signs of further easing in inflation would give the ECB more room to ease policy and support the struggling economy.
Meanwhile, China is expected to release data on Thursday. While annual inflation was roughly flat in December, the PPI was in contraction territory, indicating that government stimulus measures have not yet succeeded in stimulating demand.
crude oil price
Oil prices ended last week higher as cold weather in Europe and the United States and further stimulus from China boosted the demand outlook.
It recorded a 5% increase, compared to a 3.3% increase for the week.
Oil prices are likely to continue to be supported by an expected increase in demand in response to forecasts of colder weather in some regions.
Last week’s data showing declining US crude oil inventories also supported prices.
But the rise in oil prices is likely to be held back by strong players, fueled by expectations that the U.S. economy will continue to outperform other countries globally this year and that U.S. interest rates will remain relatively high.
