Weekly financial analysis: Investors look for important labor market data By Investing.com

Investing.com – Stocks closed higher on Friday, with the (DJIA) hitting a new record high as investors ended a volatile month on a positive note. The market’s gains came as traders digested key inflation data closely watched by the Federal Reserve.

The Dow rose 228.03 points, or 0.55%, to end the day at 41,563.08. The blue-chip index hit an all-time high in the final minutes of trading, marking yet another record. They gained 1.01% to finish at 5,648.40, while advanced 1.13% to 17,713.62.

The consumer price index, a key measure of inflation favored by the Fed, rose 0.2% in July, in line with economists’ expectations. Year-on-year, the index rose by 2.5%. Excluding food and energy, the core index also saw a 0.2% rise from last month.

The Federal Reserve is closely monitoring this inflation rate, and the data could play a role in its upcoming rate decision in September.

As August came to a close, the S&P 500 reported a monthly gain of 2.3%, its fourth consecutive monthly advance. The Dow gained about 1.8%, and the Nasdaq Composite posted an increase of 0.7%.

This week, all eyes will be on the August jobs report, which is intended to provide key economic data ahead of the upcoming Federal Open Market Committee meeting.

Investors will also be keeping a close eye on several labor market updates throughout the week, as well as key data releases, including the Index for Supply Management (ISM) Purchasing Managers’ Index ( PMI) for manufacturing and services, factory orders and construction spending.

Strategists at Yardeni Research expect upcoming labor market indicators to “show that August employment continued to grow at a more solid pace than July, which was dampened by weather conditions.” bad.”

“That should lift bond yields, the dollar, and the cyclical components of the S&P 500,” they added.

This week’s awards: Broadcom, DollarTree, Nio

In addition to economic indicators, several companies are preparing to release their earnings as the Q2 reporting period draws to a close.

Investors will focus on the retail sector, and both Dollar Tree (NASDAQ:) and Dick’s Sporting Goods Inc (NYSE:) will report.

However, the most anticipated earnings report will come from Broadcom Inc (NASDAQ:), a major player in the AI ​​boom, which is scheduled to be released after the market closes on Thursday.

Other notable companies reporting this week include Zscaler (NASDAQ:), Hewlett Packard Enterprise (NYSE:), DocuSign (NASDAQ:), Nio Inc Class A ADR (NYSE:), and UiPath (NYSE:).

What analysts are saying about US stocks

Citi: “We argued for a continuation of the S&P 500 during 2H24 albeit at a moderate pace versus 1H. NVDA and other Mag 7 components have contributed a disproportionate share of the index YTD. We remain bullish on fundamentals in the second half despite continued concerns of a recession. Investing in the resulting AI serves as a great antidote to major cultural problems. The original 2025 deal should continue, although the current deal for next year looks aggressive. ”

Bank of America: “Nonfarm Payrolls (NFP) has once again earned its crown as the most important data release for stocks. At press time, Fed funds futures are prices in the “recession-size” 100bps of cuts for the rest of 2024. Funds seem more excited about the decline than worried about a potential recession, measured by a return to near-performance of small caps and the balanced S&P of course, the biggest financial risk this week is a hot NFP that raises short-term rates.

BCA Research: “The ongoing downturn in the labor market has continued to the extent that we believe a recession is imminent.”

“We hedged smartly in the last four weeks, when the labor market fell enough to signal a recession. Investors should use the post-August 5 downturn to reduce the exposure to hazardous materials.”

UBS: “Investors need to continue to look for lower rates as Fed tapering continues.”

“Consolidated US labor force data showed that the Fed now has an opportunity to cut interest rates, in our view. US unemployment rose to 4.3% in July, and consumer prices fell 2.9% year over year. We now expect the Fed to cut rates at each of its three remaining meetings in 2024, but we think The market’s fear of a US recession is over.”