3 Jobs Reports, Constellation (STZ) Earnings Key Events Next Week

Posted on June 30, 2024 by darion

Wall Street ended a strong first half of the year on a somewhat sour note, with all three major U.S. stock averages closing lower on Friday after opening higher. The Nasdaq rose 0.24% for the week as technology rebounded. Meanwhile, the S&P 500 and Dow Jones Industrial Average are down 0.1% over the past five sessions. After two quarters on the books, the tech-heavy Nasdaq is up 18.1% so far in 2024. The S&P 500 isn’t too far behind, up 14.5% year-to-date, while the Dow lags behind, up just 3.8%. It was quite an eventful week. In addition to some earnings season laggards like Walgreens and Nike, we got an encouraging update on inflation and, of course, attended the first presidential debate of the 2024 cycle. The debate provides an opportunity to reiterate that while we all have our own personal beliefs on the issues, as investors we must keep your eyes as sober as possible. Regardless of how someone votes, we must assess the impact of candidate policies—and, more broadly, election results—on the economy, the stock market, and the individual companies in which we invest. What does this mean in terms of fiscal and monetary policy, the regulatory landscape, and on the geopolitical front (think tariffs and trade)? What do these potential policies, depending on which candidate ultimately wins, mean for sales and profits in the coming years? Jim Cramer provided some initial thoughts during the Friday morning meeting, and as we get closer to the election and have a better idea of how things seem to be shaping up, we will continue to analyze assets through this lens. One advantage we have over the current presumptive nominees of both parties — former President Donald Trump for the Republicans and President Joe Biden for the Democrats — is that we have experienced both in the White House. This is helpful because if we feel the need to “diversify” our portfolio, as a way to diversify based on the outcome of the election, we will have a better idea of what to expect. Diversification is a critical part of investing and has many different layers. “Diversification of performance” is a key factor that investors need to think about in the coming months, regardless of their own politics. The biggest economic update of the week came the morning after the debate: The Core Consumer Price Index — the Federal Reserve’s preferred measure of inflation — met expectations, rising 0.1% month-over-month and 2.6% year-over-year. The day before, we received a favorable final reading of the gross domestic product index for the first quarter, which was slightly revised upwards compared to the second reading. A pair of real estate releases — Wednesday’s report on new home sales in May and Thursday’s report on home sales in anticipation of May — came in below expectations. Energy and communications services were by far the best-performing sectors in the S&P 500 this week, rising 2.7% and 1.3%, respectively. In third place were real estate, which increased by 0.7%. The decline was led by the utilities sector, falling 1.1%, followed by materials and necessities, which fell 1.06% and 0.66%, respectively. Constellation Brands will be the only club to announce earnings in the coming week, and we’ll also get some key updates on the state of the job market. The U.S. Stock Exchange will be closed on Thursday for the July 4th holiday. Economic data The main event is Friday’s report on non-farm payrolls in June, which is one of the most important monthly reports for investors. While it doesn’t give a direct reading of inflation, it does provide insight into consumers’ purchasing power, which in a consumption-based economy means the difference between continued growth and recession. On Friday, according to Dow Jones estimates, economists expect 195,000 new jobs, a 4.0% unemployment rate (flat from May) and a 4% annual increase in hourly wages (down from the 4.1% reading in May). Taking wage inflation into account, anything above the inflation rate — 2.6% in Friday’s core PCE reading — indicates increased consumer purchasing power. That’s what we want to see, as long as the number doesn’t get so high that it raises fears of a rebound in inflation. Ahead of the U.S. government’s jobs report, we’ll take a look at private sector payrolls on Wednesday in the ADP June jobs report, which Dow Jones expects to show 170,000 jobs added this month. The ADP report isn’t as market-moving as the non-farm payrolls report, but expect investors to use it to play the non-farm payrolls report due later this week. The so-called JOLTS report — the Job Openings and Labor Turnover Survey — kicks off the week of employment data on Tuesday morning. The JOLTs publication can provide information on labor market tensions, which can help us obtain information on wage inflation. The tighter the market, the more companies may have to pay to attract top talent; it all comes down to supply and demand. While jobs will be front and center, we’ll also get an update on the state of manufacturing with the June ISM Manufacturing report, which will be released on Monday, and the May factory orders report, which will be released on Wednesday. ISM Services’ June report on Wednesday will also shed light on services in the U.S. economy. Earnings Modelo and Corona brewer Constellation Brands will report on Wednesday before the opening. This is the quarter where the benefits of Cinco De May also include commentary on how the start of summer is shaping up, which impacts the current quarter. Beyond results and the current operating environment, we continue to look for improvement in the company’s struggling wines and spirits segment. We still believe the best option is to sell this part of the business, but improving the fundamentals will be key to achieving a solid sale price for the business – or, if investors continue to own the business, for the stock to reach new highs. Monday, July 1 10:00 a.m. ET: ISM Manufacturing Tuesday, July 2 10:00 a.m. ET: JOLTS Job Opportunities Before the Bell: MSC Industrial Direct (MSM), Radius Recycling (RDUS) Wednesday, July 3 8:15 a.m. ET : ADP Employment 8:30 a.m. ET: First unemployment claims 10:00 a.m. ET: Factory Orders 10:00 a.m. ET: ISM Services 2:00 p.m. ET: Federal Open Markets Committee meeting minutes Before the bell: Constellation Brands ( STZ) Thursday, July 4 U.S. Stock Exchange Closed for July 4 Holiday Friday, July 5 8:30 a.m. ET: Non-Farm Employment (Jim Cramer’s Charitable Trust has a long position in STZ. See the full list of stocks here.) As a subscriber to CNBC Investing Club with Jim Cramer you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling shares in his charitable foundation’s portfolio. If Jim was talking about stocks on CNBC TV, he waits 72 hours after sending a trade alert before executing a trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, INCLUDING OUR DISCLAIMER. NO FIDUCIARY OBLIGATIONS OR OBLIGATIONS SHALL EXIST OR BE CREATED BY THE RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH INVESTING CLUB. WE DO NOT GUARANTEE ANY SPECIFIC RESULTS OR PROFIT.

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Wall Street ended the first half of the year on a somewhat sour note, with all three major U.S. stock averages closing lower on Friday after opening higher. Nasdaq rose 0.24% for the week as technology rebounded. Meanwhile, S&P500 and Dow Jones Industrial Average is down 0.1% over the last five sessions.