This holiday-shortened week brings a heavy package of data for investors to absorb, while geopolitical concerns continue to hover over the markets, Prudential’s Chief Market Strategist Quincy Krosby said Tuesday in her weekly “Connecting the Dots” outlook.
The data this week, culminating in Friday’s employment report, should offer a clear picture of the state of the U.S. economy at year-end, Krosby said.
“The market is looking at inflation, and the employment report will tell us whether wages are moving up in a meaningful way,” she said. The length of the workweek and the types of jobs being created are also important, she added.
Also this week, as new money comes into the market, we’ll be watching to see how managers allocate the funds, she said. Most certainly, the tax implications for specific sectors will play an important role in which ones are the beneficiaries, she added.
“What we very often see in the new year is the money coming in,” she said. “What we may see is a repositioning, selling on one side to buy into a weaker sector.”
Geopolitical concerns in the Middle East are affecting oil prices as the mass protests in Iran intensify, she said.
In Washington, the budget debate heats up as Freedom Caucus Republicans warn that spending needs to be cut, she said.
This week’s data releases:
- Tuesday: Markit manufacturing PMI
- Wednesday: construction spending; ISM manufacturing PMI; auto sales; FOMC minutes
- Thursday: ADP private payroll report; Markit services PMI
- Friday: Non-farm payroll report; ISM non-manufacturing report; factory orders
Read Quincy Krosby’s full Q1 Market Commentary: Turning the Page.
The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This is solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.