What to observe in the stock market this week

The main event this week will be the May nonfarm payrolls event. Due to the Memorial Day holiday, the week has shortened. However, there are several important factors to consider in the market, so let’s look at the economic calendar.

May jobs report on Friday

May jobs report is forecast to be published on Friday. 

The economy is expected to have added 650,000 new jobs in May compared to April’s 266,000 jobs. However, there is still a shortage of 8 million jobs in the economy. This is the number where the country was before the beginning of the coronavirus pandemic.

Nevertheless, as the economy reopens, economists believe that the number of jobs will increase steadily.

ISM data

ISM manufacturing data will be delivered on Tuesday, and ISM services data will follow it on Thursday. Both readings are forecast to be strong. However, supply chain issues are leading to deficits and higher prices.

Besides, due to Monday’s holiday, ADP nonfarm payroll data will be published one day later, on Thursday, along with the weekly figures on initial jobless claims.

Fed speeches

The Federal Reserve will publish the beige book on Wednesday. Besides, several Fed officials will speak during the week, including the central bank chairman Jerome Powell, Randal Quarles, Lael Brainard, Patrick Harker, Raphael Bostic, Charles Evans, and Robert Kaplan.

On Friday, Powell will take part in a panel at a climate change conference.

Cautious stock market

The stock market has been disturbed for several weeks due to inflation concerns. Because of that, investors will be attentive to economic data and comments made by Fed officials. 

Inflation data in the eurozone

It is also essential to monitor the publication of inflation data in the eurozone during May. It’s releasing on Tuesday, and it is the first indicator for the markets to measure the pulse of the advance in prices.

Inflation in the region is reaching the ECB’s 2% target. However, as the US central bank officials, ECB argues that it will likely be temporary.

Philip Lane, ECB Chief Economist, mentioned last week that there were nearly zero connections between the surge in prices on the reopening of the global economy. He also remarked further that markets would take years to return to pre-pandemic levels. 

OPEC+ meeting

OPEC and its allies have scheduled a meeting on Tuesday. The group reduced the oil output by 2.1 million barrels per day in April. The commodity prices have increased by 30% this year. However, gains were limited amid concerns over a possible supply increase from Iran. 

Iran and world powers are negotiating steps to be taken by Tehran and Washington on sanctions. 

Iran and world powers are negotiating on steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with Iran’s 2015 nuclear pact. If an agreement is reached, Iran will increase the global supply of oil by 2 million barrels per day.