A Critical Week for the Economy and Markets

January 29, 2024

A Critical Week for the Economy and Markets Photo

With a deluge of economic data, corporate earnings and government policy decisions out this week, it is difficult to pick where to begin today’s Monday Morning Perspectives. I will kick it off with Wednesday’s quarterly Treasury bond refunding announcement and Federal Reserve (Fed) meeting — arguably where the powerful rebound in financial markets started three months ago.1,2 After what appeared to be a coordinated move by the Fed and Treasury Department to throw a lifeline to the struggling Treasury bond market last November, investors will be closely watching news from the Treasury Department and the Fed this week.

Earnings season also kicks into high gear this week with five of the market-leading Magnificent Seven stocks — Alphabet, Amazon, Apple, Meta and Microsoft — set to report earnings.3 The concentration of large-cap technology stock gains driving the performance for the S&P 500 Index this year adds pressure on these companies to deliver on the market’s lofty earnings expectations.

Moreover, investors will closely scrutinize this week's economic data to evaluate the sustainability of recent economic strength. The economic calendar for the week features several key labor market releases, including the U.S. Job Openings and Labor Turnover Survey (JOLTS) on Tuesday, the Employment Cost Index (ECI) on Wednesday and the January employment report on Friday.2,4 Economists anticipate another robust gain in new job creation at 180,000, coupled with a slight uptick in the unemployment rate to 3.8%. Additional critical economic releases include the Conference Board's latest U.S. consumer confidence report on Tuesday and the U.S. Manufacturing Purchasing Managers’ Index (PMI) data on Thursday.



1U.S. Department of the Treasury – Quarterly Refunding Statement of Assistant Secretary for Financial Markets Josh Frost; 11/1/23

2MarketWatch – U.S. Economic Calendar; as of 1/29/24

3Fortune – Five Big Tech companies with combined market value of over $10 trillion to report earnings this week: ‘Results will be crucial for the markets’; 1/28/24

4U.S. Bureau of Labor Statistics – Job Openings and Labor Turnover Survey; as of 1/29/24

Tags: Federal Reserve | Corporate Earnings | U.S. Treasury bonds | Economic data | JOLTS | PMI

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