The equity markets in the U.S. experienced a sell-off on Friday after Federal Reserve Chairman, Jerome Powell, indicated the central bank will keep raising interest rates in the future to keep inflation in check. In the last week:

The 10-year Treasury yield stood at 3.03% on the back of a tighter monetary policy and higher borrowing costs. Further, crude oil prices moved higher last week as inventories in the U.S. declined due to rising exports of the commodity. The prices for the West Texas Intermediate crude closed at $93 per barrel on Friday.

The upcoming week will remain crucial for equity markets and investors will closely watch the U.S. labor markets as the nonfarm payrolls report for August will be reported on Friday. The Job Opening and Labor Turnover Survey report will also be released this week, providing information on hires, resignations, and separations for the month of July.

Additionally, payroll services provider ADP will release the National Employment Report, which tracks the growth in nonfarm private sector payrolls.

The Case-Shiller National Home Price Index, as well as Freddie Mac’s House Price Index, will be published on Tuesday. Wall Street will also be waiting for the ISM and Manufacturing PMI numbers that provide a peek into the health of the manufacturing sector.

 

Which companies will report earnings this week?

There are a few companies reporting quarterly earnings in the upcoming week. These include:

Lululemon Athletica: In the quarter that ended in July, analysts expect Lululemon Athletica (NASDAQ: LULU) to report revenue of $1.76 billion and adjusted earnings of $1.86 per share.

Chewy: The online pet store Chewy (NYSE: CHWY) is expected to report sales of $2.48 billion and an adjusted loss of $0.12 per share in the July quarter.

Best Buy: A big box retailer, Best Buy (NYSE: BBY) is forecast to report revenue of $10.27 billion and adjusted earnings of $1.29 per share.

 

Macro data will continue to impact the S&ampP 500

With the earnings season coming to an end, equity indices, including the S&ampP 500, will remain volatile in case macroeconomic data disappoints. As mentioned above, nonfarm payroll data will be reported for the month of August, and analysts expect jobs to increase by 290,000 this month after they rose by 528,000 in July.

The labor market has already recovered from pandemic-era losses, with unemployment rates dropping to 3.5%. A strong labor market is among the few bright spots for individuals who are wrestling with inflation and rising interest rates.

Market participants will also try to analyze the strength of the housing market as Standard and Poor is set to release its Case-Shiller National Home Price Index for June on Tuesday.

Home prices rose 1.5% on a monthly basis in May and were up 20.5% year-over-year. In March, the Home Price Index reported a record monthly gain of 3.1% in March.

Mortgage originator Freddie Mac will also report the National House Price Index for June, which rose 1.4% in May after it decelerated for four consecutive months.

The cooldown in the U.S. housing market is expected, with interest rates rising at an accelerated pace, making loans expensive. But home prices have continued to move higher in 2022 despite higher borrowing costs and lower affordability.

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