The stock market closed a good first quarter last week. The March jobs report will be important to understand whether this positive momentum will continue.
March Jobs Report
The Fed’s preferred inflation measure, the Personal Consumption Expenditures (PCE) excluding energy and food, increased by 0.3% month-over-month in February.
During a San Francisco Federal Reserve conference, Fed Chair Jerome Powell said this meeting was more in line with what the Federal Reserve was looking for. He added that the job market and the economy are currently strong, suggesting that there is no urgency to start cutting rates anytime soon.
In the upcoming week, more focus will be given to whether the Fed’s positive view of the economy is true. The Fed has vowed to keep rates steady until it is confident, so currently, all eyes are on the labor market and the March jobs report.
The continued strong data has economists feeling hopeful that inflation can decrease to 2% without the economy falling into a recession. According to Bloomberg data, the March jobs report is expected to show that 216,000 nonfarm payroll jobs were added to the US economy last month, with the unemployment rate decreasing to 3.8%.
In February, the US economy added 275,000 jobs, with the unemployment rate at 3.9%. Overall, the economists hope the March jobs report will also be strong and continue without any signs of weakness.
The Jefferies economics team, led by Thomas Simons, said in a research note on Thursday that it expects the March jobs report to maintain the strong momentum it has shown in the past few months.
They added that the recent revisions have been significant, and the makeup of payrolls has been less positive than in 2023. However, there has not been enough evidence in the peripheral labor market data to suggest that job growth will suddenly decline.
Disney’s (DIS) Board VS. Activist Investor Nelson Peltz
This week, we will also see the fate of Disney’s (DIS) board after activist investor Nelson Peltz started his lengthy campaign for a boardroom shakeup. The decision will be out on Wednesday.
The shareholder vote results will be revealed at Disney’s annual stockholders meeting.
Yahoo Finance’s Alexandra Canal said this is an important moment for Disney as the company is slowly adjusting to consumers moving away from traditional cable to less profitable streaming services.
What To Know This Week About Investor Sentiment
Some signs of investor sentiment suggest that more risk could flow into the market. However, other signs show that the market’s recent strong gains might be ready for a pause.
Citi’s equity strategy team, which is being highlighted in the Levkovich Index, has used 11 different measures to understand investor sentiment. They noted that it has reached a level of “euphoria” for the first time in this bull market.
Citi’s US equity strategist, Scott Chronert, has said that the index hit a high due to increased margin debt and short market activity, making the reading higher. According to Chronert, this usually suggests a lower chance of above-average returns.
However, he said the index is not meant for short-term timing. He added that a catalyst might still be necessary to slow the gains. Just feeling tired might not be sufficient. In a conversation with Yahoo Finance, Chronert explained that the index indicates that investor sentiment has become much more positive over recent months during the rally.
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