The Week Ahead

Macro Movers

February’s money metrics on PCE were precisely in line with forecasts and better than the prior month: 2.8% YoY vs. 2.9% prior; 0.3% MoM vs. 0.5% prior. To summarize, February’s PCE was a repeat of the past six months’ inflation data: directionally bullish, but only marginally so. 

This first week of every month is jobs week, which concludes with payrolls. Payrolls contains the most reliable and, consequently, the most influential data investors receive each month. As a result, it stands as the premier release for the week.

Manufacturing PMI: S&P and ISM manufacturing are expected to print 52.5 and 48.1%, respectively. A dovish/bullish result would be for results that underperform expectations.

Job Openings: Analysts have forecasted 8.8 million, slightly down from the prior 8.9 million. While a miss would support a Fed rate cut, a substantial miss could spark concerns that high rates have finally managed to meaningfully damage the economy, changing the narrative from “victory” cuts to “rescue” cuts. That said, I have not seen any ancillary data or anecdotal evidence hinting that such a surprisingly weak result is in the cards.

ADP Employment: Although history now firmly advises against using this as a predictor for the Payrolls report, ADP’s insights on wage trends remain relevant. Last month – for the first time in over a year – “job changers” experienced an uptick in annual pay. Consequently, I expect keen attention on this particular data point, hoping to prove the inflationary uptick an anomaly.

March Payrolls: Unemployment and hourly wages are the focal points for the most consequential release of the month. 3.8% is the consensus for unemployment. Year-over-year, hourly wage growth is forecasted at 4.1%. The consensus for MoM is 0.3%.

Currently, stocks are reacting well to data that supports a Fed rate cut or, at the very least, eliminates any remote chance of a Fed hike. For Payrolls, that translates to an increase in unemployment and a decrease in hourly wages.

Micro Movers

Conagra (CAG): This prominent packaged foods company, responsible for a variety of well-known and beloved brands – including Reddi-wip, Slim Jim, Orville Redenbacher’s, Pam, Swiss Miss, and Snack Pack, among others – reports earnings on Thursday. Food inflation remains a concern. Their quarterly results will leave tea leaves on the pressing matter.