By A turbulent five days for markets, featuring rising tensions in the Middle East and a port strike that both started and stopped, was capped off by a better-than-expected September jobs report that helped stocks close marginally up on the week.
For the first week of October the S&P 500 (^GSPC) rose 0.2%, while the Nasdaq Composite (^IXIC) and Dow Jones Industrial Average (^DJI) rose about 0.1%.
An update on inflation and the start of third quarter earnings reports will grab investor attention in the week ahead.
The October Consumer Price Index (CPI) report will headline an economic calendar that will also feature updates on consumer sentiment and the release of the minutes from the Federal Reserve’s September meeting.
On the corporate side, some of America’s largest financial institutions, including JPMorgan (JPM), Wells Fargo (WFC), and BlackRock (BLK), will kick off third quarter earnings season on Friday. PepsiCo (PEP) and Delta Air Lines (DAL) are also scheduled to report earlier in the week.
A small step forward
On Friday, the September jobs report cooled concerns that the labor market is rapidly deteriorating and will prompt another jumbo-sized rate cut.
Data from the Bureau of Labor Statistics released Friday showed the labor market added 254,000 payrolls in September, more additions than the 150,000 expected by economists. Revisions to both the July and August report showed the US economy added 72,000 more jobs during those two months than previously reported.
Meanwhile, the unemployment rate fell to 4.1% from 4.2% in August.
This, Wall Street economists and strategists argued, likely takes another half-percentage-point interest rate cut from the Fed in November off the table.
“We think that the rate descent should continue, but with today’s strong data it’s more likely that the Fed will move in 25 basis point (bps) cut increments,” BlackRock chief investment officer of global fixed income Rick Rieder wrote in a research note on Friday. “For a Fed that is recalibrating to an economy that is operating at a very solid level, it seems more appropriate for the market to price in a small probability of “no cut” at the next meeting, rather than a small probability of a 50-bps cut.”
Weekly calendar
Monday
Economic data: No notable releases.
Earnings: Duckhorn (NAPA)
Tuesday
Economic data:
Earnings: PepsiCo (PEP)
Wednesday
Economic data: MBA mortgage applications Oct. 4 (-1.3% prior), Wholesale inventories month-over-month, August final (0.2% prior); FOMC September meeting minutes
Earnings: Helene of Troy (HELE)
Thursday
Economic data: Consumer Price Index, month-over-month, September (+0.1% expected, +0.2% previously); CPI excluding food and energy, month-over-month, September (+0.2% expected, +0.3% previously); Consumer Price Index, year-over-year, September (+2.3% expected, +2.5% previously); CPI excluding food and energy, year-over-year, September (+3.2% expected, +3.2% previously); Real Average Hourly Earnings, year-over-year, September (+1.4% previously); Real Average Weekly Earnings, year-over-year, September (+0.9% previously); Initial jobless claims, week ended Oct. 5 (237,000 expected, 225,000 prior)
Earnings: Delta Air Lines (DAL), Domino’s (DPZ), Tilray (TLRY)
Friday
Economic data: Producer Price Index, month-over-month, September (+0.1% expected, +0.2% previously); PPI, year-over-year, September (+1.6% expected, 1.7% previously); Core PPI, month-over-month, September (+0.2% expected, 0.3% previously); Core PPI, year-over-year, September (+2.7% expected, +2.4% previously); University of Michigan consumer sentiment, October preliminary (70.3 expected, 70.1 previously)
Earnings: BlackRock (BLK), BNY Mellon (BK), JPMorgan (JPM), Wells Fargo (WFC)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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