The coming week in the US financial market will feature significant economic reports on the personal consumption expenditures (PCE) price index, a key inflation measure, as well as GDP growth, durable goods orders, manufacturing, and consumer confidence.
Investors will also watch comments from US central bank speakers, including Fed Chair Jerome Powell’s opening remarks at the US Treasury Market Conference. These insights will be crucial for gauging the future path of monetary policy, especially following last week’s historic interest rate cut.
Additionally, several major companies are set to report their earnings, providing further insights into the health of various sectors and potentially influencing market movements.
Key Economic Reports
Inflation remains a focal point for investors, with the release of the PCE Price Index and Core PCE Price Index for August. The Core PCE is expected to rise by 0.2% month-on-month (MoM), consistent with the previous month’s increase. The Core PCE Price Index showed a 2.6% year-on-year increase in July.
Next, the GDP Growth Rate for the second quarter will be finalized. The consensus forecast stands at 3%, aligning with the preliminary estimate of a 3% annualized growth rate. This marks a significant improvement from the 1.4% growth observed in the first quarter, reflecting a resilient economic expansion.
The consensus forecast for Durable Goods Orders report for August anticipates a 2.8% MoM decline, following a robust 9.9% surge in July. This data will provide insights into the demand for long-lasting manufactured goods and could signal shifts in business investment trends.
The S&P Global US Composite, Manufacturing, and Services PMI for September will offer insights into the health of the manufacturing and services sectors. The consensus forecasts are 48.5 for Manufacturing PMI and 55.2 for Services PMI. In August, the Manufacturing PMI was revised down to 47.9, indicating a marked deterioration, while the Services PMI was revised up to 55.7, pointing to robust growth.
Consumer confidence will be gauged through the Conference Board Consumer Confidence index for September, with a consensus forecast of 102.9. Additionally, the housing market will be under scrutiny with the release of New Home Sales and Pending Home Sales data for August. New home sales are expected to reach 700,000 units, while pending home sales are forecasted to rise by 3.1% MoM.
Personal income and spending data for August will also be closely monitored. Personal Income is forecasted to rise by 0.4% MoM, up from a 0.3% increase in July. Meanwhile, Personal Spending is expected to grow by 0.3% MoM, following a 0.5% increase in July. These figures will provide a snapshot of consumer financial health and spending behaviour.
Earnings Calendar and Market Insights
Last week, optimism around a potential soft-landing scenario helped drive stocks higher, with the S&P 500 (SPX) experiencing a rotation into growth-oriented sectors. Should the SPX continue to hold above breakout levels from prior all-time highs, the major uptrend is likely to persist, bolstering investor confidence.
The earnings calendar for the week includes reports from several major companies, such as Autozone Inc (NYSE:AZO), Micron Technology Inc (NASDAQ:MU), Cintas Corporation (NASDAQ:CTAS), Costco Wholesale Corporation (NASDAQ:COST), and Jabil Inc (NYSE:JBL).
The plethora of economic data releases, central bank communications, and corporate earnings reports will be monitored to gauge the health of the economy, the trajectory of inflation, and the potential direction of monetary policy. As always, staying informed and adaptable will be key to navigating the market landscape in the days ahead.
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
