Jobs data will steal the spotlight next week. What to watch for in 3 key labor reports

Despite a late-session surge Friday, all three major U.S. stock indexes ended the holiday-shortened trading week in the red, putting an end to the Nasdaq Composite and S & P 500 ‘s five-week winning streaks. The Dow Jones Industrial Average fell for the second straight week. The declines came as first-quarter earnings season inched closer to the finish line, with the focus on retail and technology companies. The week’s economic data releases proved to be a mixed bag. While the Federal Reserve’ s preferred inflation gauge largely met expectations Friday, an updated look at first-quarter U.S. gross domestic product on Thursday came in softer than expected. April pending home sales and a manufacturing index for the Chicago region both were weak and at their lowest levels since 2020. The S & P 500’s sector performance over the past four sessions flipped last week’s action on its head. Energy was the top-performing sector of the week, followed by real estate; the Club’s lone oil-and-gas producer, Coterra Energy , advanced 5.1%, trailing only Foot Locker and Best Buy in the portfolio (more on them shortly). Meanwhile, technology and industrials led the S & P 500 to the downside, which showed up in our portfolio, too. Salesforce , Palo Alto Networks , Broadcom and Microsoft were among the worst-performing Club stocks this week. Industrial holding Eaton dropped 2.4%. Foot Locker and Best Buy secured the Nos. 1 and 2 spots in the portfolio this week thanks to better-than-expected earnings results Thursday, which sent their shares surging in the session. Both stocks rose again Friday, up 7.1% and 4%, respectively. Costco on Friday retreated from record highs on the back of its earnings release Thursday night , though it was a quality quarter with not much to nitpick. However, Salesforce was slammed on Thursday, dropping 19.7% in its second-worst session ever, as its quarterly report Wednesday evening showed the pace of deal activity remains sluggish. Salesforce clawed back some of those steep losses Friday, adding 7.5%. More broadly, we’ve now heard from 98% of S & P 500 companies this earnings season. According to data compiled by FactSet, 78% of those companies reported a positive earnings surprise, while 61% posted a positive sales surprise. In the week ahead, earnings season will further wind down. No Club names are set to report. And while there are a few notable names outside the portfolio scheduled to release results, jobs data will be front and center. Economy Believe it or not, a new month is already upon us, and with it comes the May nonfarm payrolls report — one of the most important economic releases for investors. The data shines a light on the health of the U.S. labor market and, by extension, the health of the consumer. In a consumption-driven economy like the U.S., where private consumption accounts for roughly two-thirds of GDP, the consumer will have the greatest impact on overall economic growth. If the economy is to avoid a recession as the Fed continues to wage its war on inflation, then the consumer needs to remain resilient. This means all those who want to work can indeed find a job, with wages advancing at a level that provides healthy buying power, but not at a pace that sparks a rebound in inflation — or even fears of a rebound. In this way, the nonfarm payroll report also offers clues on the near-term path of inflation. As of Friday, economists are looking for 178,000 payroll additions, according to Dow Jones, with the unemployment rate unchanged from April at 3.9%. Expectations are for a 4% annual increase in hourly wages, up slightly from the 3.9% reading we got in April, according to FactSet. As always, payroll processing firm ADP will release its May private-sector jobs report before the government’s nonfarm payroll report. Wall Street is looking for 179,000 private payroll additions in the Wednesday morning report, according to Dow Jones. Keep in mind: ADP’s release isn’t quite as informative as the nonfarm payroll report, but because it comes out two days prior, it is often used as a means of gaming the government numbers. On Tuesday, we’ll get the latest JOLTS data, shorthand for the Job Openings and Labor Turnover Survey conducted by the Labor Department. The report provides insight into the tightness of the labor market, which can help inform us about wage inflation. The tighter the market, the more companies may need to pay to entice top talent. More demand for workers with less supply (tighter conditions) amounts to higher prices (or, in this case, wages) and vice versa. Expectations are for 8.3 million job openings in April, according to Dow Jones estimates, compared with 8.5 million in the prior month. Outside of jobs, additional closely watched reports next week include the Institute for Supply Management’s May manufacturing report due out Monday and April factor orders on Tuesday. Both releases offer an update on the state of U.S. manufacturing activity. Then on Wednesday, the ISM’s May services report will provide a look at the state of the services sector. Earnings A few noteworthy earnings reports set for next week include CrowdStrike and Hewlett Packard Enterprise after the close on Tuesday. Both companies will be able to shed some insight into how enterprises are allocating their budgets against a backdrop of higher interest rates. As Salesforce’s report this week indicated, the buying environment remains “measured.” The question is whether it is broad-based slowing, or whether companies are still pushing forward aggressively with investments into critical areas such as cybersecurity and AI infrastructure. We will also get several notable retail reports next week such as lululemon , Bath & Body Works and Dollar Tree , which will provide further insight into the health of the consumer; a full list of the retailers reporting is below. It’s well-understood that sustained inflation is pressuring the consumer, leading to increased importance on value-focused purchases and “trade down” to cheaper alternatives. Still, these retailers can shed more light on that dynamic and give us a sense of where the money is flowing. Monday, June 3 10:00 a.m. ET: ISM Manufacturing Before the bell: Science Applications (SAIC) After the bell: GitLab (GTLB), HealthEquity (HQY), Lavoro (LVRO) Tuesday, June 4 10:00 a.m. ET: Factory Orders 10:00 a.m. ET: JOLTS Job Openings Before the bell: Bath & Body Works (BBWI), Ferguson (FERG), Core & Main (CNM), Donaldson Company (DCI), Designer Brands (DBI) After the bell: CrowdStrike (CRWD), Hewlett Packard Enterprise (HPE), PVH (PVH) Wednesday, June 5 8:15 a.m. ET: ADP Employment Survey 10:00 a.m. ET: ISM Services Before the bell: Dollar Tree (DLTR), Ollies Bargain Outlet (OLLI), United Natural Foods (UNFI), Hibbet Sports (HIBB), Campbell Soup (CPB), Lands’ End (LE), THOR Industries (THO), Brown-Forman (BF) After the bell: lululemon (LULU), ChargePoint (CHPT), Victoria’s Secret (VSCO) Thursday, June 6 8:30 a.m. ET: Initial Jobless Claims Before the bell: NIO (NIO), Ciena (CIEN), Big Lots (BIG), JM Smucker (SJM), Toro (TTC), ABM Industries (ABM) After the bell: DocuSign (DOCU), Vail Resorts (MTN), NGL Energy (NGL) Friday, June 7 8:30 a.m. ET: Nonfarm Payrolls (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Free America Network Articles