March was the most turbulent month since the 2008 financial crisis. Still, the U.S. and global indexes managed to close in the black. The S&P 500 finished the quarter with a decent rise, giving investors a reason to cheer after the dizziness of the roller-coaster trading in the last few months.
This past week, U.S. equities managed to recover from the hit to investor sentiment posed by the banking sector troubles. All U.S. sectors except Communication Services were up for the week; only a handful of stocks finished the week in the red. The past week’s rally was ignited by the report on personal consumption expenditures (PCE), which declined more than was expected. The deceleration of PCE created optimism about the Fed succeeding in its fight against inflation, raising hopes that it may not have to raise rates as much as previously feared.
This week we’ll see a number of important reports published. It’s worth watching for the following economic news items, as all of them can prove to be major market movers. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
March’s S&P/Markit Manufacturing PMI – Monday, 4/3 – The report captures business conditions in the manufacturing sector, which dominates a large part of total GDP (almost 20%), thus is an important indicator of business conditions and overall economic conditions in the United States. The index is expected to remain unchanged from February, showing a mild contraction. A surprise on the upside might add to the pressures on the Fed to increase rates, whereas a lower-than-expected reading may signal a weaker-than-perceived economy.
March’s S&P/Markit Services PMI – Wednesday, 4/5 – This report captures business conditions in the services sector, which is responsible for over 75% of the U.S. GDP and employs 80% of the labor force. Thus, changes in the Services sector growth directly reflect U.S. economic conditions as well as the outlook for growth and changes in job market conditions. Currently, economists expect continued expansion in the sector, matching a long-term median. A surprise on the upside will signify stronger economic growth, leading to higher inflation expectations, while lower-than-expected results may cause rate-increase expectations to be dialed down.
March’s Unemployment Rate – Friday, 4/7 – Together with additional reports, such as Non-Farm Payrolls, Labor Force Participation, Average Hourly Earnings and Average Weekly Hours, the Unemployment report paints the picture of the state of the U.S. job market. It is one of the most important indicators of the state of the economy in general, as well as one that the Federal Reserve watches closely when deciding on its interest rate policy.
