This week is an excellent opportunity to shift our attention back to the broader economic landscape.
Recently, I came across some intriguing graphs that revealed a downward trend in Florida's housing inventory. This development stands in stark contrast to one of the most prominent macroeconomic trends we've observed over the last two years: a general weakness in the housing market. Although it's still early to draw definitive conclusions, this emerging theme deserves our attention. A rebound in home prices could significantly benefit consumer spending, especially given the current state of distressed assets within the housing sector.
In addition, the manufacturing sector has faced considerable challenges; however, there were some signs of improvement noted in the Chicago Purchasing Managers' Index (PMI) released on Friday. One must consider that the effects of Trump's industrial policies may gradually come into play, reinvigorating this sector that has largely been overlooked amidst the growing focus on artificial intelligence. Manufacturing remains a substantial component of the economy and could present significant opportunities going forward.
Today marks the beginning of a crucial macroeconomic week in the U.S., starting at 9:45 AM ET with the S&P Global US Manufacturing PMI for January, which had a preliminary reading of 51.9. Just 15 minutes later, we will receive the ISM Manufacturing report. Current consensus expectations suggest a slight uptick to 48.5, which is marginally higher than last month’s 48.3 but still below the key 50 mark that delineates economic expansion from contraction.
Looking ahead to the rest of the week:
On Tuesday, we will see the Job Openings and Labor Turnover Survey (JOLTS) report, followed by the ADP Employment report for January on Wednesday, where the consensus forecast is for an increase of 45,000 jobs. Additionally, we will be looking at the S&P Global US Services PMI, which has shown more robustness recently, with the previous reading sitting at 52.5. For further details, you can check the economic calendar at (https://investinglive.com/EconomicCalendar/).
Thursday morning will bring us the weekly initial claims data for the end of January, with consensus estimates projecting 210,000 new claims and a total of 1,850,000 continuing claims.
The week will conclude on Friday with the highly anticipated jobs report for January. The market expects Non-Farm Payrolls to show an increase of 50,000, a reduction from the prior month’s increase of 65,000. Meanwhile, the unemployment rate is predicted to remain stable at 4.4%, and Average Hourly Earnings are expected to indicate a monthly growth of 0.3%, consistent with the previous month’s figures.
In terms of corporate earnings, here are the companies to keep an eye on this week (https://investinglive.com/stocks/palantir-amd-alphabet-and-amazon-among-the-names-reporting-next-week-20260131/).
