The Fed, and What Else to Watch

Looks like another busy week for investors and traders with the focus on earnings, economic data, and interest rate policy decisions.

 Let’s begin with companies reporting quarterly results and providing further insight into the health and wellbeing of the U.S. consumer. We kick things off Monday with Avis Budget (CAR), NXP Semiconductors (NXPI), Arista (ANET), and Marriott (MAR). Tuesday, we have SoFi (SOFI), Uber (UBER), Pfizer (PFE), BP (BP), Marathon (MRO), AMD (AMD), and Airbnb (ABNB). Wednesday, the focus will be on CVS (CVS), Paramount (PARA), Roku (ROKU), Etsy (ETSY), and Qualcomm (QCOM). Later in the week, we have Moderna (MRNA), PayPal (PYPL), Crocs (CROX), Peloton (PTON), Warner Bros Discovery (WBD), Carvana (CVNA), DraftKings (DKNG), and more. 

In terms of economic data, the focus will be on jobs, primarily the non-farm payrolls due out Friday. But, between now and then we have the Chicago PMI, the Dallas Fed-Manufacturing Survey, ISM data, Construction Spending, JOLTS, and the ADP figures due out Wednesday. Productivity and Costs will come out Thursday, along with the ISM Services Data. With Friday’s jobs report, investors will look to see how impactful the Fed’s efforts to combat inflation with higher rates have been on what’s been a strong and resilient labor market here in the U.S. On Friday, the NFP is expected to show the U.S. added 210K jobs last month.

With the Fed combating inflation by raising rates and expected to continue on this path into the end of the year, rates have been on the rise last week, with the TYX moving to 4.42%. Wednesday, Fed Chair Jerome Powell is expected to raise rates by another 75bps. The FOMC will get a look at two payrolls reports and one CPI release before the November meeting, and with a 75bps hike priced in, I think that’s where most of the questions Powell gets at the Q&A will be directed. We’ll also hear from the Bank of England this week, also expected to raise rates by 75bps. So a busy week for currencies again.

Lastly, keep an eye on grains, as Russia said they will pull out of the Black Sea Deal after a series of missile attacks on their fleet in the area. This has grain prices spiking to begin the week and will feed directly into the inflation discussion, especially if it spills over into energies. Crude is currently comfortable for the time being around 85 dollars a barrel.

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