Markets This Week, 9/04-9/08, 2023: Welcoming the Fall

Economy and Markets: The Week Ahead

Last week the markets reversed the previous weeks’ downslide on fresh hopes of a Goldilocks economic scenario. Q2 GDP Growth was revised downwards, back to the level of its initial forecasts given prior to advance estimate’s release. Meanwhile, the slide in housing prices, which weighed on the regional and smaller banks’ outlook, slowed. The hiring remained robust (the increase in overall Unemployment rate may have been a seasonal uptick), but the decline in wage growth raised hopes that the job market is cooling.

All this could support the doves within the Fed’s ranks, if not for the continued strength of U.S. consumers. Personal spending, the main driver of the U.S. GDP growth, jumped in July at its fastest clip since January. At the same time, Core PCE, the Federal Reserve’s preferred gauge of inflation, rose on an annual basis, underlining Jerome Powell’s concern about the upside risks to inflation. However, the moderation seen in the Consumer Confidence index, if continued, may indicate lessening pressures on the demand side of the inflation equation.

After a difficult August, stock markets are welcoming fall with fresh hopes that the economy will resemble the weather in September: cooler, to enable the inflation dampening, but not too cool, to skirt the recession. Meanwhile, the policymakers will continue keeping a close tab on economic reports coming out until their next meeting on September 19^th. It is worthwhile for investors, too, to keep an eye on data, as it can help shed some light on the central bank’s further moves and their implications for the stock markets.

In this uncertain environment, investors are recommended to base their decisions on trustworthy data and analysis.

Upcoming Earnings and Dividend Announcements

The Q2 2023 reporting season has almost ended, but there are still companies reporting this week.

The most noteworthy reports this week are those of Zscaler (ZS), Gitlab (GTLB), GameStop (GME), C3ai (AI), American Eagle (AEO), DocuSign (DOCU), and Kroger Company (KR).

Companies’ reporting dates, consensus EPS forecasts, past data, analyst ratings, and price targets can be found on the TipRanks Earnings Calendar..

This week, Ex-Dividend dates are coming for the payouts of Nvidia (NVDA), UnitedHealth (UNH), FedEx (FDX), Elevance Health (ELV), Becton Dickinson (BDX), Occidental Petroleum (OXY), Autoliv (ALV), Cigna (CI), and other dividend-paying firms.

Companies’ Ex-Dividend and Dividend Payment dates, analyst ratings, and price targets can be found on the TipRanks Dividend Calendar.

Upcoming Economic Calendar Events

There are several important reports scheduled to be published in the next few days:

» On Tuesday, we will receive a reading on July’s Factory Orders, which provides an insight into the trends within the manufacturing sector and serves as one of the leading indicators for the overall economy, as it reflects vendors’ outlook for the consumer demand for manufactured goods.

» On Wednesday, we will receive a second estimate on August’s ISM Services PMI, which supplies a detailed view of the services sector of the U.S. economy. Since services are responsible for almost 80% of GDP, the PMI can help gain an important insight into the direction of the economy, serving as a leading indicator for economists and policymakers.

» On Friday, we will see the reports on Q2 2023 Non-Farm Productivity and Unit Labor Costs. The Productivity report measures output per hour of labor. Since higher labor productivity leads to healthier business activity, i.e., higher economic growth, the report helps discern near-term, as well are long-term GDP growth trends. The Unit Labor Costs report reflects the price of a unit of production in terms of wages and helps uncover inflationary or disinflationary pressures coming from wages.    

Current and scheduled economic reports, Fed statements, and other releases, as well as their level of impact on stock markets, can be found on the TipRanks Economic Calendar.