Week Ahead on Wall Street: jobs, the Fed, and more earnings

Estimated reading time: 4 minutes

More jobs, more problems? Nah.

The U.S. economy has defied many a forecast in the post-pandemic era. Job growth, for example, was meant to moderate but the September employment report blew right past expectations. Are we going to get a repeat of that this week?

It’s jobs week, which means we’ll get the ADP Employment Report showing private sector job growth on Wednesday, and the government’s official tally on Friday morning.

No doubt, the strong job market has helped consumer spending chug along. Americans have kept their wallets handy in spite of high prices, which has helped the economy grow at a perhaps unexpected rate, as last Thursday’s blockbuster 4.9% annualized GDP growth rate showed.

But it’s not just jobs week, it’s also Fed week!

The central bank’s monetary policy meeting is kicking off on Tuesday, culminating in its interest rate decision on Wednesday afternoon. The relative strength of the economy, especially the labor market, has afforded the Federal Reserve considerable breathing room in its fight against inflation and supported its “higher for longer” approach.

Market expectations are overwhelmingly seeing no rate change at this week’s meeting. But for the December decision, some expect another interest rate increase.

Earnings Season Keeps Going

It’s another busy one for earnings. McDonald’s (MCD), ON Semiconductor (ON), and Pinterest (PINS) will kick off the earnings week.

On Tuesday, we’ll get reports from BP (BP), Pfizer (PFE), and the world’s largest broadline food distributor, Sysco (SYY). Pfizer recently lowered its earnings and revenue guidance for the year as demand for its Covid products wanes.

Wednesday will be the busiest earnings day of the week with reports expected from CVS (CVS), Kraft Heinz (KHC), Cheesecake Factory (CAKE), DoorDash (DASH), Etsy (ETSY), Paypal (PYPL), Qualcomm (QCOM), Roku (ROKU), Zillow (ZG), and Airbnb (ABNB). Recently, Airbnb CEO Brian Chesky acknowledged the company was “fundamentally broken” due to a lack of foundation, but added he has plans to fix it.

Thursday will be another eventful day, with reports coming in from Eli Lilly (LLY), Ferrari (RACE), Marriott (MAR), Pelton (PTON), Shopify (SHOP), DraftKings (DKNG), ​​Novo Nordisk’s (NVO) and Yelp (YELP). With the growing popularity of Novo Nordisk’s Ozempic, its competitor Eli Lilly has prioritized getting its diabetes drug Mounjaro cleared to treat obesity as well.

Dominion Energy (D) and Cinemark (CNK) will conclude the earnings week. The former is in the process of constructing a $9.8 billion wind project off the coast of Virginia, estimated to power 660,000 homes upon completion.

Also on the Calendar

The week will start off with the Dallas Fed Manufacturing Index. Although production rebounded, the index indicated a decline in overall business conditions last month.

On Tuesday, we’ll get a look into the housing market with the Case-Shiller Home Price Index. Last month, this 20-city index showed the first year-over-year increase in housing prices in five months.

On Wednesday, aside from ADP numbers, and the Fed, we’ll also get an update to the 30-year fixed-rate mortgage, the latest ISM Manufacturing data, and September job openings.

As usual, Thursday will feature initial jobless claims numbers, and we’ll get preliminary quarterly labor productivity data.

Finally, the week will conclude with the jobs report, and ISM services data for October will also be released.

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