The financial markets are entering perhaps the most consequential week of the year so far. It will be an eventful week with many key economic indicators coming out and they could have a big impact on market direction. We hope you’re as excited as we are for this action-packed week! PMI manufacturing indices and the February employment report will release during the next week, providing a better understanding of the economy’s direction. Most important releases are the Dallas Fed Manufacturing Index and trade balance figures. We’ll see some employment statistics, all of these between July 28 and July 31.
On July 28, the Dallas Fed Manufacturing Index will be the first high-frequency or major economic indicator to be released. Analysts pay close attention to this index, as it tends to be a bellwether for the manufacturing activity in one of America’s most important economic engines—Texas. An increase in this index is typically a precursor to robust economic growth. Conversely, a drop can trigger fears over the health of the manufacturing industry.
The next day — July 29 — many key reports are scheduled to be released. Of these, the preliminary Goods Trade Balance will give us the most detail on the nation’s trade imbalances. This scorecard calculates export-import balance for goods alone, not services. It can show us where trade policies might be changing, or where global demand is moving.
Wholesale Inventories will be released on the 29th as well. This metric is a big deal. Retaliatory reduction in production. Accelerating this dynamic is the level of unsold goods in the wholesale sector, which undersells the production pipeline and supply chain equilibrium. An unexpected drop or rise in wholesale inventories can indicate changes in consumer demand or broader economic changes.
On the similar day, FHFA’s House Price Index provide the second replace on housing market appreciation or depreciation (full cycle) in current months. This index tracks monthly changes in single family home prices across the country, an important indicator of the health of our housing market and overall economy. Surging demand strong demand and a recovering housing market can cause prices to rise.
Also on the agenda for July 29 is the Job Openings and Labor Turnover Survey (JOLTs) report. This survey is an underappreciated goldmine of information about labor market dynamics, as it breaks out job openings, hires, and separations. A large number of job openings is usually a positive sign for the labor market, and falling numbers can be seen as a sign that the economy is faltering.
The Conference Board’s Consumer Confidence Index, scheduled for release on July 29, is another key data point. It measures how Americans feel about the health of the economy. This optimism can lead to increased consumer spending, which is a major engine of our economic growth. Conversely, an increase in consumer confidence almost always bodes well for stronger consumer spending and business investment.
Besides these three reports, we’ll have the Dallas Fed Services Index on July 29th. This index is a key measure of service sector activity in Texas. As a supplement to the manufacturing-only data, it provides a wider lens on the state’s overall economic health.
Finally, for big movers on Friday, on July 29th the American Petroleum Institute (API) will be issuing its weekly report regarding U.S. crude oil stockpiles. For anyone keeping tabs on energy markets, this report is always important to pay attention to, as it can move oil prices and oftentimes signals trends in demand.
On July 30, all that is going to change, when a handful of key indicators are released. Taken together, these findings will illuminate our country’s new economic reality. The ADP Employment Change report will offer the first look at what’s happening with overall private sector employment for July. This report is usually a good harbinger of the much bigger Nonfarm Payrolls data that come out later in the week.
And on that very same day the preliminary Q2 GDP Growth Rate will be revised. This revision may offer fresh perspectives on the economic growth experienced during the second quarter of the year, impacting forecasts for future growth.
Pending Home Sales data are scheduled for release on July 30. Unlike pending home sales which measure signed contracts, this report serves as a much better gauge of the housing market’s health. A rise in pending sales could be a positive sign for a recovering housing market.
The weekly MBA Mortgage Applications report will be released on this day. This lending metric helps tell the story of how active and competitive mortgage lending has been, while helping to detect broader trends in housing demand and interest rates.
On July 30, the Energy Information Administration (EIA) will release its weekly report on U.S. crude oil inventories. Without it, we can’t understand supply levels in the otherwise balmy energy market, which is critical, and the price of oil may go nuts.
As this week moves ahead, focus will shift quickly to July 31 and a number of important reports go public. Next week begins to provide an answer, with inflation and unemployment data for the euro area coming out. This information will provide critical intelligence about conditions on the Atlantic that may affect U.S. markets.
On the schedule for July 31 is the weekly Initial Jobless Claims report. This report tracks the number of individuals filing for unemployment benefits and serves as a vital indicator of labor market health. A decline in claims often suggests a strengthening job market, while an increase may raise concerns about economic stability.