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What to expect in the week ahead (CAG, STZ, LW, WBA)

Moomoo Breakfast USwrote a column01/03/2022 09:32
What to expect in the week ahead (CAG, STZ, LW, WBA)
Weekly market recap

U.S. stocks finished their final trading session of the year lower, capping off a record-setting 2021 that came despite the persistent headwinds of Covid-19.

The $Dow Jones Industrial Average(.DJI.US)$ on Friday fell 59.78 points, or 0.16%, to 36,338.30. The $S&P 500 index(.SPX.US)$ pulled back 0.26% to close at 4,766.18. The $Nasdaq Composite Index(.IXIC.US)$ dipped 0.61% to 15,644.97.
What to expect in the week ahead (CAG, STZ, LW, WBA)
Here's a look at the return of S&P 500 sectors
Source: jh investment management
Source: jh investment management
The week ahead in focus

All three indexes finished the month of December higher. December marked the Dow's fifth-straight monthly gain and the Nasdaq recorded a six-month winning streak.

The major averages posted double-digit returns this year, as the global economy began its recovery from the 2020 Covid lockdowns, while the Federal Reserve maintained supportive measures first implemented at the onset of the pandemic.

This week's earnings reports are clustered on Thursday: $Conagra Brands(CAG.US)$, $Constellation Brands(STZ.US)$, $Lamb Weston(LW.US)$, and $Walgreens Boots Alliance(WBA.US)$ all report then. $Costco(COST.US)$ Wholesale also releases December sales data on Wednesday. Fourth-quarter earnings season begins in earnest toward the end of the following week.
What to expect in the week ahead (CAG, STZ, LW, WBA)
The economic data highlight of the week will be jobs Friday. The Department of Labor releases December employment figures that morning, and is expected to show an increase of 374,000 nonfarm payrolls and an unemployment rate of 4.1%. Those would compare with 210,000 new jobs and a 4.2% jobless rate in November.

Other data to be released this week include the Institute for Supply Management's Manufacturing Purchasing Managers' Index for December on Tuesday, followed by the Services equivalent on Thursday. Both are expected to remain solidly in expansion territory.
Fed watchers will be paying close attention to the minutes from the Federal Open Market Committee's mid-December meeting, which are out on Wednesday. Officials accelerated the pace of the central bank's asset-purchase tapering at that gathering.
What to expect in the week ahead (CAG, STZ, LW, WBA)
Monday 1/3

The Census Bureau reports construction spending data for November. Consensus estimate is for the total to rise 0.6%, month over month, to a seasonally adjusted annual rate of $1.61 trillion. That would be a record high, surpassing October's $1.6 trillion.

Tuesday 1/4

The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey. Economists forecast 11.2 million job openings on the last business day of November, 167,000 more than in October. Job openings remain near the record level of 11.1 million set earlier this summer.

The Institute for Supply Management releases its Manufacturing Purchasing Managers' Index for December. Expectations are for a 60.5 reading, roughly even with November's figure. The ISM's PMI has had 18 consecutive monthly readings of more than 50, indicating expansion in the U.S. manufacturing sector.

Wednesday 1/5

$Costco(COST.US)$ Wholesale reports sales for December.

The Federal Open Market Committee releases the minutes from its mid-December monetary-policy meeting.
The Bureau of Economic Analysis reports light-vehicle sales for December. Consensus estimate is for a seasonally adjusted annual rate of 13.5 million vehicles. That would be 4.7% more than in November, but 17.2% less than the level a year ago. Supply constraints, especially a global shortage of semiconductors, have hampered auto sales for much of the second half of 2021.
ADP releases its National Employment Report for December. Economists forecast an increase of 360,000 jobs in private-sector employment, with 5.4 million jobs added this year, after a loss of 9.5 million jobs in 2020.

Thursday 1/6

$Conagra Brands(CAG.US)$, $Constellation Brands(STZ.US)$, $Lamb Weston(LW.US)$, and $Walgreens Boots Alliance(WBA.US)$ report quarterly results.

ISM releases its Services PMI for December. Economists forecast a 66.9 reading, about two points below the November figure, which was a record high for the index's 23-year history.

The Department of Labor reports initial jobless claims for the week ending on Jan. 1. For the four weeks in December, claims averaged 199,250, the lowest reading since October 1969.

Friday 1/7

The Department of Labor releases the employment report for December. The economy is expected to add 374,000 jobs, after a gain of 210,000 in nonfarm payrolls for November. The unemployment rate is seen edging down to 4.1%, from 4.2%. Payroll gains have come in well below estimates in three of the four previous jobs reports, with an average shortfall of 343,300. The labor-force participation rate is likely to tick up to 61.9%, from 61.8%.

Source: CNBC, Dow Jones Newswires, jhinvestments
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