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By Noreen Burke
Investing.com – The U.S. jobs report for July will be the highlight in the week ahead with investors on the watch for any catalysts that could encourage the Federal Reserve to tighten monetary policy sooner. The economic calendar also features the Institute for Supply Management’s PMIs along with data on factory orders and initial jobless claims. Earnings will continue to dominate headlines, with more than a quarter of S&P 500 companies set to report in the coming week. The crackdown by Chinese market regulators could continue to be a major story and in the UK the Bank of England is to hold its latest policy meeting where it is likely to echo the Fed’s view that there is still some way to go before stimulus can be reduced. Here is what you need to know to start your week.
July jobs report
Friday's U.S. non-farm payrolls report will provide fresh clues on the strength of the economic recovery and inform the outlook for Fed policymakers.
Economists are expecting the economy to have added 900,000 jobs in July after a forecast-beating 850,000 in June.
Last week Fed Chair Jerome Powell said the job market still had "some ground to cover" before it would be time to start scaling back stimulus measures the central bank enacted in the spring of 2020 to combat the economic fallout from the coronavirus pandemic.
In June Fed officials began debating how to wind down bond purchases but there is no clear timetable yet for when it will begin pulling back emergency market support measures.
Other economic data
Aside from the jobs report, the economic calendar also features other important data including the Institute for Supply Management’s manufacturing data Monday and service sector data on Wednesday. The ISM manufacturing PMI is expected to remain robust, but to again underline supply side strains in the economy that are contributing to higher inflation.
Data on factory orders is slated for Tuesday and the weekly report on initial jobless claims is on Thursday. Jobless claims have fallen considerably since the start of the year amid growing labor demand but the delta variant that’s fueled a recent surge in new infections across the country poses a risk.
Several Fed officials are also scheduled to speak during the week, including Boston Fed President Eric Rosengren, Fed Vice Chair Richard Clarida and Fed Governor Christopher Waller.
Earnings
Investors will get a fresh batch of earnings reports in the week ahead from companies such as Eli Lilly (NYSE:LLY), CVS Health (NYSE:CVS) and General Motors (NYSE:GM).