NEW YORK, September 1, 2024 (FFN) – As the new week unfolds, several key market events are poised to capture the attention of investors and analysts alike. Here are the top five events that could shape market dynamics in the coming days:
1. August Jobs Report and Federal Reserve’s Rate Decision
This week’s most anticipated event is the August employment report, set for release on Friday. This report will be closely scrutinized for insights into the Federal Reserve’s potential interest rate cuts. Fed Chair Jerome Powell has hinted at a possible rate reduction, with many expecting a 25-basis point cut at the September 17-18 meeting. Signs of a softening labor market could stoke fears of a recession, similar to the concerns that shook markets in early August. Investors will also monitor Wednesday’s JOLTS job openings report and Thursday’s ADP private sector hiring data.
2. Market Volatility as September Begins
September has a reputation for being a volatile month in the markets, and this year could follow suit. Wall Street recently saw a rebound, with the Dow Jones Industrial Average hitting consecutive all-time highs amid optimism over potential Fed rate cuts. However, any unexpected economic data could trigger fresh volatility. Analysts from Bank of America have noted that September and October are historically unpredictable months for stocks, making this period one to watch closely.
3. Bank of Canada’s Expected Rate Cut
The Bank of Canada is widely anticipated to announce its third consecutive rate cut on Wednesday. Having already reduced its benchmark rate twice since June to 4.5%, the central bank is expected to make further cuts this year. While Canada’s economy grew slightly more than expected in the second quarter, stagnation in June and a projected flat performance in July suggest potential challenges ahead. The focus is shifting from inflation control to economic support.
4. Pressure on Oil Prices
Oil prices remain under pressure, with Brent crude and West Texas Intermediate (WTI) futures both ending the week lower. Brent crude futures for October delivery, which expired on Friday, dropped $1.14 USD to $78.80 USD per barrel. WTI crude also saw a decline, settling down $2.36 USD at $73.55 USD per barrel. Market sentiment has been weighed down by expectations of increased OPEC+ supply starting in October, coupled with uncertainty around the Fed’s rate cuts, which could impact demand for oil.
5. China’s Economic Data Release
China is set to release its August Caixin Manufacturing PMI data on Monday, which is expected to return to expansion territory after contracting in July. Recent government data showed that Chinese manufacturing activity hit a six-month low in August, adding pressure on Beijing to implement further economic stimulus measures.
Key Words: August employment report, Federal Reserve, interest rate cuts, market volatility, Bank of Canada, oil prices, China economic data
