HomeArticlesMarket Minute: Market Prep for the Week

Market Minute: Market Prep for the Week

2 min read

Kevin Green

Correspondent

Labor market data from last week depicted a significant rebound in labor conditions compared to prior months. Non-Farm Payrolls exceeded street expectations by over 100,000 jobs, and this growth was complemented by strong wages, with Average Hourly Earnings rising by 0.4%, which translates into a 4.8% annualized increase if the trend continues. This favorable data allowed the S&P 500 to reverse earlier losses for the week and close in positive territory.

However, the economic data releases don't end there. This week could be called "inflation data week," with the Consumer Price Index (CPI) and Producer Price Index (PPI) reports scheduled for release on Thursday and Friday, respectively. We'll also receive an update from the Federal Reserve with the release of the FOMC minutes on Wednesday. Although many may view these minutes as somewhat outdated, they will provide additional insights into the dissenting vote by Fed Member Michelle Bowman, as well as the growing concerns around labor market weakness.

Energy in Focus

Geopolitical risks in the Middle East will continue to be closely monitored as tensions escalate between Israel and Iran. The market is expecting a response from Israel after Iran launched a multitude of ballistic missiles into Israel last week. Over time, equity markets tend to price in prolonged geopolitical events, but for commodity traders, these developments have led to increased demand for energy products like oil and gasoline. If Iranian oil infrastructure is targeted, depending on what is affected, energy markets could see supply and logistics disruptions, even in a backdrop of decelerating global demand growth.

Currently, crude oil is not experiencing a significant "short-covering" event, which could be another boost for prices, as non-commercial net long positioning approaches near-term lows. For oil bulls, geopolitical risk alone may not sustain higher prices, but if these price advances last long enough for Chinese economic data to show positive effects from recent stimulus announcements, a technical reversal may be imminent. The closely watched 3:2:1 crack spread, which measures the profitability of converting 3 barrels of oil into 2 barrels of gasoline and 1 barrel of diesel, did not improve in the same manner as the energy products themselves last week with only a 0.68% change in that metric. This still puts into question the risk of energy companies readjusting their forward profitability estimates which could result in a rerating lower in equity valuations.

Hurricane season has also been largely overlooked by many energy traders. However, this week there is a forecast of another strong storm potentially hitting the western coast of Florida. The current trajectory of Hurricane Milton does not place many oil and gas rigs in its direct path, but any shift of the storm westward toward Louisiana could significantly increase the risk of damage to oil infrastructure and logistics networks.

Featured clips

Gold & Silver Well-Positioned Safe Havens for Market Outlook

The Watch List

► Play video

"Robust Economy" Signals Shallower Rate Cut Cycle

Trading 360

► Play video

WisdomTree Connect's Tokenization of Crypto & Tech Stocks

Morning Trade Live

► Play video

Rate Cut & Recession Outlook After Strong Jobs Report

Morning Trade Live

► Play video

Charles Schwab and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions.

ON AIR
8:00 pm
Trading 360
replay
12:00 am
Trading 360
REPLAY
1:00 am
Fast Market
REPLAY
2:00 am
Next Gen Investing
REPLAY
3:00 am
Market Overtime
REPLAY
3:30 am
Market Overtime
REPLAY
education
4:00 am
Your First Trade
REPLAY
education
4:30 am
Inside the Mind of a Trader
REPLAY
education
5:00 am
Inside the Mind of a Trader
REPLAY
education
5:30 am
Inside the Mind of a Trader
REPLAY
6:00 am
Market Overtime
REPLAY
6:30 am
Market Overtime
REPLAY
7:00 am
Futures
8:00 am
Morning Trade Live
10:00 am
Trading 360
11:00 am
Fast Market
12:00 pm
Next Gen Investing
1:00 pm
The Watch List
2:00 pm
Market On Close
3:30 pm
Market Overtime
REPLAY
4:00 pm
Trading 360
REPLAY
5:00 pm
Fast Market
REPLAY
6:00 pm
Next Gen Investing
REPLAY
7:00 pm
Market Overtime
REPLAY
7:30 pm
Market Overtime
REPLAY
ON AIR
8:00 pm
Trading 360
REPLAY
9:00 pm
Market Overtime
REPLAY
9:30 pm
Market Overtime
REPLAY
education
10:00 pm
Inside the Mind of a Trader
REPLAY
education
10:30 pm
Inside the Mind of a Trader
REPLAY
education
11:00 pm
Inside the Mind of a Trader
REPLAY
education
11:30 pm
Your First Trade
REPLAY

Get the Market Minute

Daily insights for every investor