Economic Outlook: A Busy Week Ahead
As we dive into the new year, the markets are gearing up for a packed week of economic data, culminating in the highly anticipated jobs report on Friday. Despite the shortened trading week due to the National Day of Mourning for former President Jimmy Carter on Thursday, investors are bracing themselves for a flurry of key indicators.
Market Performance: A Mixed Bag
Last week, the Dow Jones Industrial Average slipped 0.6%, while the S&P 500 and Nasdaq both retreated 0.5%. However, the year has started on a positive note, with the Dow up 0.44%, the S&P 500 rising 1%, and the Nasdaq surging 2% over the first two trading days of 2025.
Jobs Report Takes Center Stage
The December jobs report from the Labor Department is expected to reveal a significant slowdown in Nonfarm Payrolls, with the consensus forecast at 150,000 and our own prediction at 125,000. The Unemployment Rate is anticipated to remain steady at 4.2%. This critical data will provide valuable insights into the labor market’s trajectory.
Other Key Economic Indicators
In addition to the jobs report, this week’s economic calendar is filled with important releases, including Factory Orders on Monday, Job Openings and the Trade Deficit on Tuesday, and the private payrolls ADP employment report and Federal Reserve rate meeting minutes on Wednesday.
Average Hourly Earnings: A Crucial Component
Argus Chief Economist Chris Graja highlights the Average Hourly Earnings component of the jobs report, which is expected to show 4% growth. While this may seem like good news for workers, it raises questions about how Federal Reserve members will reconcile this growth with the 2% inflation target. Graja notes that labor productivity, which grew 2.2% in the third quarter, plays a crucial role in this equation.
Earnings Season on the Horizon
As we approach the mid-January kickoff of the new earnings season, Argus forecasts 12% EPS growth for S&P 500 companies in 2025, building on the higher-than-expected 9% growth in 2024. This week, investors will be keeping a close eye on earnings reports from companies like Jefferies Financial Group, Albertsons, Delta Air Lines, Constellation Brands, and Walgreens Boots Alliance.
Stay Ahead of the Curve
With so much economic data on the horizon, it’s essential to stay informed and up-to-date on the latest market trends and insights. By doing so, investors can make informed decisions and position themselves for success in the year ahead.
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