The S&P 500 and Dow Jones marked new highs in July following a stock selloff related to the June 23rd Brexit vote in the U.K., boosted by central bank monetary easing from global central bankers and decent U.S. corporate earnings.
Last Wednesday the U.S. Federal Reserve predictably held back from raising interest rates at their July FOMC meeting and cited in their released statement that U.S. household spending has been growing strongly, business fixed investment has been soft, and near term risks to the economic outlook have diminished.
Committee members at the Fed expect inflation to move closer to the Fed’s 2 percent inflation target in the “medium term” as energy prices, import prices, and the U.S labor market rebound.
“Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further” the statement reads.
On Friday the Bank of Japan disappointed global investors when it decided to not expand its bond buying program and left its primary interest rate unchanged at -0.1 percent.
This week global investors will be paying close attention to a wide mixture of U.S. economic data for signs about the health of the world’s largest economy.
The U.S. non-farm payroll jobs report for July will be released on Friday.
Economists from briefing.com have a consensus estimate of 185,000 non-farm payroll jobs added to the U.S. economy in July following June’s robust expansion of 287,000 in June that helped soothed the market about the condition of the labor market in the U.S. after a dismal jobs report in May.
New PCE inflation figures for June will be released on Tuesday with the Fed’s preferred inflation gauge, Core PCE index expected to show an increase.
Some of the other economic data released this week in the middle of corporate earnings includes June consumer spending released on Monday along with the ISM index and construction spending figures for June.
ADP will release their July’s private sector jobs report on Wednesday. The briefing.com consensus forecast is for 165,000 private sector jobs added in July. Markit services PMI is also released on Wednesday for July.
On Thursday factory orders for June and the weekly jobless claims will come into focus.
Besides the closely watched non-farm payroll report on Friday, the trade balance for June and consumer credit for June will also be reported.
Full Economic Calendar-U.S.
Monday- ISM Index (July), Consumer Spending (June), Construction Spending (June)
Tuesday- PCE inflation (June), Auto/Truck Sales (July)
Wednesday- ISM services (July), Markit services PMI, ADP employment change (July), MBA Mortgage Index (7/30), Crude Inventories (7/30)
Thursday- Challenger Job Cuts (July), Initial & Continuing Jobless Claims, Factory Orders (June), Natural Gas Inventories
Friday- Non-farm payroll Jobs Report (July), Trade Balance (June), Consumer Credit (June)