uploads///Hourly Earnings

A Data-Heavy Week Ahead, Dominated by Jobs Report

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May. 2 2016, Published 10:43 a.m. ET

Jobs report: The highlight of the week

It was an uneventful FOMC (Federal Open Market Committee) meeting last week when the Fed stood firm on no interest rate hike. Then all eyes turned to the jobs report this coming Friday, May 6. The FOMC statement noted that the labor market was improving despite a slowdown in the economy.

The markets will be looking most closely at the average hourly earnings number, which is going to be the trigger for the Fed. Given the general weakness in commodity prices, inflation will have to come from the wage side of things.

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Aside from the jobs report, we also have a slew of important economic data from ISM (Institute for Supply Management) reports, construction spending, unit labor costs and productivity, and factory orders. The earnings season is in full swing, and we’ll hear from mortgage REIT giant Annaly Capital on Wednesday.

Economic data this week

Here’s a rundown of this week’s economic data.

Monday, May 2:

  • Markit US Manufacturing PMI (Purchasing Managers’ Index)
  • ISM Manufacturing
  • ISM Prices Paid
  • construction spending

Tuesday, May 3:

  • ISM New York
  • IBD/TIPP (Investor’s Business Daily/TechnoMetrica Institute of Policy and Politics) Economic Optimism
  • vehicle sales

Wednesday, May 4:

  • MBA (Mortgage Bankers Association) mortgage applications
  • ADP Employment Report
  • trade balance
  • non-farm productivity
  • unit labor costs
  • Markit US Services PMI
  • Markit US Composite PMI
  • ISM Non-Manufacturing Composite
  • factory orders
  • durable goods orders

Thursday, May 5:

  • initial jobless claims
  • Bloomberg Consumer Comfort
  • Challenger Job Cuts

Friday, May 6:

  • non-farm payrolls
  • unemployment rate
  • average weekly hours
  • average weekly earnings
  • underemployment rate
  • labor force participation rate
  • consumer credit

The earnings this week include:

Wednesday, May 4

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Implications for mortgage REITs

REITs such as Annaly Capital Management (NLY) and American Capital Agency (AGNC) will likely focus on data that will move the bond market. The jobs report is probably the only market-moving data point this week. Investors who want to bet on interest rates can look at the iShares 20+ Year Treasury Bond ETF (TLT).

Impact on homebuilders

Homebuilders such as PulteGroup (PHM) and CalAtlantic Group (CAA) will pay the most attention to construction spending and some of the other macro data. The seasonal uptick for the homebuilding sector is in full swing. Investors will be waiting to hear about traffic patterns. Investors can get access to the homebuilding sector through the SPDR S&P Homebuilders ETF (XHB).

In the next part of the series, we’ll look in detail at the week in review and the Fed’s firm stance.

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