Wall St week ahead: Jobs report, inflation data to test US rate path, economic strength
SPY•Investors will assess the September jobs report, expected to show 100,000 jobs added, and Wednesday’s PCE data for signals on inflation and the Federal Reserve’s rate path. Treasury yields have risen, while an equal-weight S&P 500 index was down about 4% in September.
1. Jobs and inflation in focus
The September employment report, due October 2, is expected to show 100,000 jobs added and an unemployment rate of 4.2%. Wednesday’s PCE report will offer insight into inflation trends; core PCE rose 3.3% in the 12 months through July, above the Fed’s 2% target.
2. Rate expectations firm
The Fed raised rates by a quarter percentage point on September 16 and signaled another increase before year-end. Fed funds futures on Thursday indicated a greater than 60% chance of a hike at the Fed’s next meeting in October. Investors are watching the reports for clues to how the Fed’s thinking may evolve.
3. Yields and market breadth
The 30-year Treasury yield reached its highest level in more than 20 years, while the 10-year yield rose well above 5%. The S&P 500 was little changed in September, but nine of its 11 sectors were down for the month and its equal-weight version fell about 4%.
