Week Ahead on Wall Street: A Good (or Bad) Friday for Jobs?

Estimated reading time: 6 minutes

A tumultuous first quarter officially ends this week, and Wall Street will kick off April with one of the most important economic indicators: the monthly jobs report. There is just one catch — the stock and bond market will be closed when the data drops.

At a Glance

• The news: The March employment report arrives on Good Friday, when U.S. markets are closed. The big question is whether the economy has bounced back from February’s surprising loss of 92,000 jobs.
• The context: Fed officials have made it clear they are in no rush to cut interest rates, especially with upheaval in the Middle East pushing oil prices and inflation expectations higher.
• Your move: With investors having the entire weekend to digest the numbers, expect some pent-up turbulence when the opening bell rings the following Monday. If the data shows healthy job growth, it gives the Fed even more reason to keep borrowing costs elevated — to the detriment of bonds and high-flying growth stocks.

Investors have had a lot to digest lately: The Federal Reserve has cemented its “holding steady” stance on interest rates, energy prices have surged amid the war with Iran, and mortgage rates are pulling a frustrating about-face just in time for the spring housing season. But there is no rest for the weary. While Wednesday brings April Fools’ Day, Friday’s blockbuster jobs report will be no joke — even if Wall Street is technically out of the office.

Right now, the labor market is the linchpin of the U.S. economy. And the big question is whether the economy has bounced back from February’s surprising loss of 92,000 jobs.

A rebound would be good for workers, of course. But on Wall Street, which has been obsessed with interest rate cuts for over a year, it would be a double-edged sword. When more people are employed and wages are rising, consumers keep spending. That’s great for the economy, but it can also keep inflation stubbornly high — which is exactly what the Fed is concerned about.

If the March numbers show that unemployment remained low and hiring was fairly healthy, it would validate the Fed’s recent hawkishness. That scenario could easily send Treasury yields (and by extension, mortgage rates) even higher. Conversely, if the labor market shows signs of cooling off, it could throw a lifeline to battered bond markets and revive some of that faded optimism for rate relief later this year. Investors will be crossing their fingers for a “Goldilocks” jobs report — not too hot, not too cold. 

On the Docket

Monday

• March Dallas Fed Manufacturing Activity: This is the Dallas Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• Fedspeak: New York Fed President John Williams will discuss the economy at an event with the Staten Island Economic Development Corporation, followed by moderated Q&A.

Tuesday

• January FHFA House Price Index: This is a broad measure of single-family house prices released by the Federal Housing Finance Agency. 
• March Chicago Business Barometer: The barometer provides information on U.S. economic activity and business conditions, consisting of seven activity indicators and three buying policy indicators. 
• March Conference Board Consumer Confidence: How consumers feel about economic conditions affect their spending habits. This survey places a particular focus on job availability and the state of the labor market. 
• February Job Openings: A key measure of business demand for labor is the number of job openings, since reducing openings is easier and preferable to layoffs. 
• March Dallas Fed Non-Manufacturing Activity: This is the Dallas Fed’s survey of services executives in the region on business conditions and their outlook.
• Fedspeak: Chicago Fed President Austan Goolsbee will give opening remarks on human capital and low real interest rates at a virtual event for the regional Fed’s Economic Mobility Project.
• Earnings: FactSet Research Systems (FDS), McCormick & Company (MKC), Nike (NKE)

Wednesday

• March ADP Employment Report: This survey, usually released a day or two before the official government jobs report, offers insight into private sector employment trends. 
• February Retail Sales: This measures spending at retail stores and is a key indicator of consumer demand. 
• March ISM Manufacturing PMI: This index from the Institute for Supply Management tracks how purchasing managers across the manufacturing sector feel about the business environment. 
• March Wards Total Vehicle Sales: Cars are a big ticket item for consumers, so underlying vehicle sales trends can help shine a light on demand for durable goods.
• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.
• Fedspeak: St. Louis Fed President Alberto Musalem will discuss the economy and monetary policy at the American Enterprise Institute, followed by moderated Q&A.
• Earnings: Conagra Brands (CAG)

Thursday

• March Challenger Job Cuts: The firm Challenger, Gray & Christmas tracks the number of layoff announcements each month by sector. 
• February Trade Balance: Trade, made up of exports and imports, is an important driver of economic activity.

Friday

• Stock and bond markets are closed for Good Friday.
• March Employment Situation Summary: This monthly blockbuster release from the Labor Department gives a comprehensive look at employment, wages, and hours worked in the previous month. 
• March S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.

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