Futures on US Stocks Climb as Shaking Wall Street Anticipates the Employment Report
Investors are assessing whether a series of concerning data points to serious economic concerns, so next week, the stakes are high for the monthly U.S. jobs report.
Falling Treasury rates and a decline in bitcoin are further signs of growing investor apprehension, as the benchmark S&P 500 stock index has retreated 4% from its peak earlier this month.
Consumer confidence, corporate activity, and retail sales are among the recent economic announcements that have let us down or deteriorated. Businesses and consumers are experiencing uncertainty due to the Trump administration’s drastic trade and other policy changes.
Investors will watch for the February jobs report, which is coming on March 7, to either soothe concerns or increase them. The monthly employment release is seen as one of the most critical data points when evaluating the state of the economy.
According to Michael Arone, chief investment strategist for the U.S. SPDR Business at State Street (NYSE:S TT) Global Advisors, concerns about a U.S. economic growth crisis have the market on edge. Additional gasoline for that growth worry is provided if the unemployment rate shows symptoms of deterioration.
Compared to the 143,000 new jobs gained in January, a Reuters poll estimates that employment expanded by 133,000 positions in February. It is anticipated that the unemployment rate will be 4.0%.
According to Matthew Miskin, co-chief investment strategist at John Hancock Investment Management, the employment market is the most significant pillar of the American economy. Whether or not the customer has a job and is content with it will ultimately determine whether or not they have excessive debt or make purchases.
An excellent employment report might also cause market concerns since investors are still wary of inflation despite worries about the economy slowing down. The annual pace of inflation is still higher than the Federal Reserve’s 2% objective.
Inflation may take longer than anticipated to normalize, according to Angelo Kourkafas, senior investment strategist at Edward Jones, who stated that the market is aiming for a number that is neither too chilly, too negative in comparison to forecasts, nor too hot.
One bright spot for equities might be that, after the recent underwhelming economic data, investors now anticipate more monetary policy easing than they anticipated earlier this month. Based on Fed funds statistics, LSEG reports that at least two interest rate drops are expected by December.
The jobs statistics coincide with Trump’s drastic efforts to reduce the size of the workforce, as the administration ordered agencies to carry out more widespread layoffs on Wednesday. A Reuters count of announcements following Trump’s promises shows that thousands of U.S. federal employees have been let go in recent weeks.
“The risks are rising that households may begin to hold back purchases,” stated Torsten Slok, chief economist at Apollo Global Management (NYSE: APO), after government employees and contractors expressed concerns about their jobs.
In a report on Thursday, Slok stated, “We are very carefully watching the incoming data for signs if this is an inflection point for the business cycle, but we remain bullish on the economic outlook.”
Data will be due next week when several Fed officials are scheduled to appear and share their perspectives on the economy, manufacturing, and services sector.
Investors continue to be wary of market turbulence brought on by Trump’s additional tariff and policy pronouncements. On Wednesday, the president hinted at a levy on European automobiles and other commodities while expressing optimism for another halt to the high import duties from Canada and Mexico.
Matthew Maley, chief market strategist at Miller Tabak, wrote on Thursday that yesterday was just another instance of how the president’s or the White House’s remarks may upend a day.
