This week ahead || Sep 4 - Sep 8
Fed in focus as earnings, economic calendars slow: What to know this week
In the week ahead, U.S. markets will be closed on Monday for Labor Day, and then investors can expect a lighter economic calendar. Highlights for the week include service sector readings, the Federal Reserve's Beige Book report, and corporate earnings from companies like Kroger, GameStop, and Zscaler. The August jobs report showed the U.S. labor market continues to slow, with the economy adding 187,000 new jobs but the unemployment rate rising to 3.8%. Investors now anticipate that the Fed will not raise rates at its September meeting, with markets pricing in a 94% chance of no change in rates. Despite September historically being a challenging month for stocks, some analysts believe the recent rally may defy historical patterns, with potential gains of 2% to 3% in September.
Dow Jones Futures: How To Handle This Market Rally; 'Magnificent 7' Near Buy Points
U.S. stock markets will be closed on Monday for Labor Day. However, Dow Jones futures, S&P 500 futures, and Nasdaq futures will continue trading on Sunday and Monday, although their movements might not necessarily reflect the actual trading in the next regular stock market session. Despite a strong week in the stock market rally, yields on Treasury bonds rebounded on Friday. Key tech giants, including Apple, Microsoft, Amazon, Google parent Alphabet, Nvidia, Tesla, and Meta Platforms, have performed well in 2023 and are currently in range or hitting key resistance levels. The stock market rally is in a confirmed uptrend, with leading stocks performing well. However, it's essential for investors to participate with discipline.
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Raimondo warns China patience of US business is 'wearing thin'
U.S. Commerce Secretary Gina Raimondo has warned China that American business patience is "wearing thin" and that U.S. companies deserve a "predictable environment and a level playing field" in their dealings with China. Raimondo emphasized that while some actions of the Chinese government are positive, there are new challenges facing U.S. firms, including unexplained large fines, raids on businesses, and changes to counterespionage laws. She also revealed that her email was hacked before her late August trip to China, and while Chinese officials suggested it wasn't intentional, she emphasized the importance of addressing such issues to build trust. Raimondo noted that China's economy is facing challenges, including a slowdown and troubles in the real estate sector, and suggested that the Chinese economy did better when it was more transparent and market-oriented.
US expects to upgrade Vietnam ties, risks China anger
The United States is expected to elevate its diplomatic relations with Vietnam to the top level, alongside China and Russia, when President Joe Biden travels to Hanoi in a week. This move has potential implications for China, Vietnam's much larger neighbor, and the business landscape. While Vietnam initially expressed caution about the upgrade due to concerns about China's reaction, the Biden administration has been working to persuade Vietnam to make the move. It remains unclear what immediate benefits Vietnam will gain from this diplomatic upgrade, but it could lead to increased U.S. military supplies, support for Vietnam's semiconductor industry ambitions, and expanded cooperation in energy sectors such as LNG and offshore wind. U.S. firms like Boeing and AES may also make announcements during Biden's visit to Vietnam.