Stock Market Outlook: What to Watch in the Week Ahead

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What can we expect from the stock market in the week ahead? As earnings season comes to a close, experts say investors will continue to wrestle with what could come next from the Federal Reserve.

“It looks like it’ll be a quiet week next week, which should give investors some time to digest the flood of information we’ve learned over the past several weeks,” says Callie Cox, U.S. investment analyst at eToro.

Data on jobs, inflation and rates have become the focal point for investors, she adds — and that will likely continue in the coming days as we get some more insight into the state of the labor market.

The central bank repeatedly hiked interest rates throughout 2022. Though the most recent hike of 25 basis points was smaller than investors had become accustomed to, Fed Chair Jerome Powell has made it clear that more interest increases are likely if inflation or labor market data remains hot.

Here’s what market watchers will have their eyes on the week of March 6:

Latest data on job openings

On Wednesday, the U.S. Bureau of Labor Statistics will release the latest Job Openings and Labor Turnover Survey (nicknamed JOLTS), which will give insight into January’s job vacancies and the labor market overall.

Tom Hainlin, global investment strategist at U.S. Bank Wealth Management, says the new data on job openings is one of the key macroeconomic reports he’s watching ahead of the next Federal Open Market Committee meeting later in March. That’s when the Fed will announce the next target for interest rates.

Hainlin says he’ll have his eye on whether there was any demonstrable progress on filling the 11 million job openings December’s JOLTS reports revealed, whether openings are at large or small companies, and which sectors are seeing vacancies.

February’s jobs report

More data on the labor market will be coming March 10, when the government will release its report on February’s employment situation, including job growth and unemployment.

“It’s one of the best looks we have into how well the Fed is balancing the job market and inflation,” Cox says of the report. “And at this point, it seems like the Fed can’t cool the job market enough to control inflation just yet.”

She adds that “we overanalyze each point we get until the next set of data comes out,” and the S&P 500 has moved 1% or more on five out of the last six jobs days.

“There could be a similar overreaction this time around,” Cox says.

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