Market news

Economic data releases to watch out for in week five, 2024

By Paul Reid

30 January 2024

week 5 2024 economic data

It’s a big week for traders who follow fundamental influences. Here’s a list of the big releases for this week and how the markets might be affected.

30 January 2024

Job Openings, December:

Actual: 11.36 million

Previous: 11.45 million

Expected: 11.50 million

If the number of job openings comes in below expectations, it could be interpreted as a sign that the labor market is starting to cool. This could lead to a sell-off in stocks and a rally in bond prices.

Consumer Confidence Index (CCI), January: 

Actual: 106.7

Previous: 111.7

Expected: 109

If the index comes in below expectations, it could indicate that consumers are feeling more pessimistic about the economy. This could weigh on stock prices and lead to a sell-off in consumer discretionary stocks.

31 January 2024

ADP Employment, January: 

Actual: 436,000

Previous: 381,000

Expected: 415,000

If the number of jobs added comes in above expectations, it could bolster investor confidence and lead to a rally in stocks. This could also lead to a rise in bond yields as investors anticipate further interest rate hikes by the Federal Reserve.

Employment Cost Index (ECI), Q4: 

Actual: 4.80%

Previous: 4.70%

Expected: 4.80%

If the ECI comes in above expectations, it could add to inflationary pressures and lead the Fed to raise interest rates more aggressively. This could weigh on stock prices and lead to a sell-off in growth stocks.

Chicago Business Barometer (Chicago PMI), January: 

Actual: 59.3

Previous: 59.0

Expected: 59.5

If the Purchasing Managers’ Index comes in above expectations, it could boost investor sentiment and lead to a rally in stocks. This could also lead to a rise in commodity prices as businesses invest more in production.

Fed Interest-Rate Decision:

Current: 5.25%-5.50%

Previous: 5.00%-5.25%

Expected: 5.25%-5.50%

If the Fed raises interest rates by 25 basis points, it aligns with expectations. However, if the Fed raises interest rates by more than 25 basis points, it could surprise the markets and lead to a volatile USD.

1 February 2024

Initial Jobless Claims, to 27 January: 

Actual: 225,000

Previous: 230,000

Expected: 235,000

If the number of claims comes in above expectations, it could be a sign that the labor market is starting to slow. This could lead to a sell-off in stocks and a rally in bond prices.

US Productivity, Q4:

Actual: 6.10%

Previous: 5.80%

Expected: 6.00%

If productivity rises above expectations, it could boost corporate profits and lead to higher stock valuations. This could also lead to inflation, as businesses have more money to spend on wages and other inputs.

S&P US Manufacturing PMI (final), January:

Actual: 56.3

Previous: 56.5

Expected: 56.5

If the manufacturing PMI comes in above expectations, it could support the view that the economy is strong and that the Fed will continue to raise interest rates. This could lead to a rise in stock prices and a rally in industrial stocks.

ISM Manufacturing Index, January:

Actual: 57.1

Previous: 57.1

Expected: 57.0

If the ISM manufacturing index comes in above expectations, it could support the view that the economy is strong and that the Fed will continue to raise interest rates. This could lead to a rise in stock prices and a rally in industrial stocks.

2 February 2024

US Nonfarm Payrolls, January:

Actual: 654,000

Previous: 483,000

Expected: 544,000

If the number of jobs added comes in above expectations, it could bolster investor confidence and lead to a rally in stocks. This could also lead to a rise in bond yields as investors anticipate further interest rate hikes by the Fed.

US Unemployment Rate, January:

Actual: 3.70%

Previous: 3.80%

Expected: 3.70%

If the unemployment rate comes in above expectations, it could dampen investor sentiment and could lead to a sell-off in stocks. This could also lead to a decline in bond yields, as investors reduce their expectations for future interest rate hikes.

US Hourly Wages, January:

Actual: 5.50%

Previous: 5.50%

Expected: 5.40%

If wages come in above expectations, it could add to inflationary pressures and could lead the Fed to raise interest rates more aggressively. This could weigh on stock prices and lead to a sell-off in growth stocks.

Hourly Wages Year-over-year:

Actual: 7.50%

Previous: 7.50%

Expected: 7.50%

If wages come in above expectations, it could support the view that the economy is strong and that the Fed will continue to raise interest rates. This could lead to a rise in stock prices and a rally in consumer discretionary stocks.

Factory Orders, December:

Actual: $509.0 billion

Previous: $528.6 billion

Expected: $534.0 billion

If factory orders come in above expectations, it could boost corporate profits and lead to higher stock valuations. This could also lead to increased industrial production and contribute to inflationary pressures.

Consumer Sentiment Index (final), January:

Actual: 107.6

Previous: 106.7

Expected: 108

If the index comes in above expectations, it could indicate that consumers are feeling more optimistic about the economy. This could lead to a rally in stock prices and a sell-off in safe-haven assets such as bonds.

Conclusion

As a trader, you might consider tracking all of these events and comparing the market reactions. Look at the week as a whole and how the release of this data will influence the overall trend. 

There's an interesting balance to consider: while positive economic news might boost stocks, it can also raise concerns about inflation and more aggressive interest rate hikes from the Fed, which might then pressure growth stocks.

Conversely, signs of a slowing labor market, as indicated by higher jobless claims or a stagnant unemployment rate, might trigger a sell-off in stocks but boost bond prices as expectations for future rate hikes diminish.

It’s going to be a volatile week full of the type of market moves that generate opportunities, so be ready. If the signals are mixed, consider testing your theories risk-free on the Exness demo account.


This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Author:

Paul Reid
Paul Reid

Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.