Investors Prep For a Key Jobs Report

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The major economic data release next week will be the U.S. jobs report on Friday. The update on nonfarm job additions will be the last one before the Federal Reserve meets on June 11-12, amid growing uncertainty on the timing of rate cuts. The April PCE inflation report released Friday showed the Fed’s official target, the 12-month Core PCE, came in at 2.8%, steady from March’s reading. On Seeking Alpha, analyst Logan Kane noted that the Fed is starting to see its rate hiking campaign bite the economy. He also highlighted that while the most anticipated recession in history has been delayed, it almost certainly hasn’t been avoided. Things are a little bit different across the Atlantic, where the European Central Bank is highly anticipated to announce an interest rate cut on June 6.

The earnings schedule for next week includes reports from Hewlett Packard Enterprise (NYSE:HPE), Lululemon (LULU), and NIO (NIO). The event calendar is loaded with conferences, including Nareit REITweek and COMPUTEX Taiwan. Walmart (WMT) will also be in the spotlight next week, with a shareholder meeting and its traditional Associates Celebration scheduled on separate days. Investors will also be watching Nvidia (NVDA) just ahead of the 10-for-1 stock split that becomes effective after the close on Friday.

Earnings spotlight: Monday, June 3 – GitLab (GTLB) and Science Applications (SAIC). See the full earnings calendar.

Earnings spotlight: Tuesday, June 4 – CrowdStrike (CRWD), PVH (PVH), Hewlett Packard Enterprise (HPE), and Bath & Body Works (BBWI). See the full earnings calendar.

Earnings spotlight: Wednesday, June 5 – Lululemon (LULU), Dollar Tree (DLTR), Brown-Forman (BF.A), Campbell Soup (CPB), and Five Below (FIVE). See the full earnings calendar.

Earnings spotlight: Thursday, June 6 – Samsara (IOT), DocuSign (DOCU), J.M. Smucker (SJM), and NIO (NIO). See the full earnings calendar.

Volatility watch: Options trading volume has moved higher on Robinhood Markets (HOOD). The most overbought stocks per their 14-day relative strength index include Global Ship Lease (GSL), UL Solutions (ULS), and Danaos (DAC). The most oversold stocks per their 14-day Relative Strength Index include Leggett & Platt (LEG), DLocal (DLO), and Coursera (COUR). Short interest is still sky-high on Faraday Future Intelligent Electric (FFIE) and MicroCloud Hologram (HOLO).

IPO watch: Aluminum recycler Novelis (NVL) and Israeli glass film manufacturer Gauzy (GAUZ) are expected to price their IPOs and begin trading in the week ahead. The analyst quiet period ends on ZEEKR Intelligent Technology (NYSE:ZK) to free up analysts to post ratings. Zeekr traded more than 20% higher than its IPO pricing level at the time of publication.

Dividend watch: Companies forecast to increase their quarterly dividend payouts include Tootsie Roll (TR) to $0.10 from $0.0874 and UnitedHealth (UNH) to $2.07 from $1.88. Read through some of the dividend stock picks from Seeking Alpha analysts.

Investor events: The conference calendar is loaded for the week ahead. The four-day Nareit REITweek conference will begin in New York City. The list of executives due to participate includes Digital Realty (DLR) CEO Andy Power, Safehold (SAFE) CEO Jay Sugarman, Tanger (SKT) CEO Stephen Yalof, Invitation Homes (INVH) CEO Dallas Tanner, VICI Properties (VICI) CEO Edward Pitoniak, Public Storage (PSA) CEO Joe Russell, Realty Income (O) CEO Sumit Roy, SL Green Realty (SLG) CFO Matthew DiLiberto, and Equinix (EQIX) CFO Keith Taylor. The three-day Jefferies Global Healthcare Conference will also be on the radar of investors. The long list of participating companies includes Aldeyra Therapeutics (ALDX), Savara (SVRA), Agilent (A), and Gilead Sciences (GILD). Meanwhile, Deutsche Bank Global Consumer Conference in Paris will include presentations or fireside chats from Kraft Heinz (KHC), Kellanova (K), Sysco (SYY), Procter & Gamble (PG), Starbucks (SBUX), and Philip Morris International (PM). The conference has led to share price moves in the past based on the updates on management expectations. Snowflake (NYSE:SNOW), Cisco (CSCO), Precigen (NASDAQ:PGEN), and Entergy (NYSE:ETR) will also hold investor events that could provide a jolt to share prices.

May Jobs Report preview: The May nonfarm payrolls report will have added significance next week as it arrives just days before the policymaking committee of the Federal Reserve meets. While there has been some evidence of softening in the labor market in recent months, a stronger jobs report could tip the scales toward higher interest rates for longer. Economists anticipate 185K nonfarm jobs will have been added to the U.S. economy during May. The unemployment rate is expected to hold steady at 3.9%. Average hourly earnings are seen rising 0.3% month-over-month, a slight acceleration from the prior pace of 0.2%. Bank of America said public sector hiring should bounce back after a flattish April, and healthcare hiring should remain robust. Wage growth is seen rising 3.9% on a year-over-year comparison. BNP Paribas warned that the sharp drop in the pace of job creation between March and April likely overestimated the degree of weakening due to the shift of Easter on the calendar not being fully accounted for and with education hiring expected to bounce from a very low level in April. The general takeaway is that the Federal Reserve will have an even sharper focus on the nuances of the jobs report than it typically does.

Stock split watch: Li-Cycle (LICY) will begin trading on a split-adjusted basis on June 4 following its 1-for-8 reverse stock split. Soligenix (SNGX) will begin trading on a split-adjusted basis on June 6 following a 1-for-16 stock split. STRATA Skin Sciences (SSKN) will begin trading on a split-adjusted basis on June 7 following the 1-for-10 reverse stock split. There will also be a focus on Nvidia (NVDA) as it heads into a 10-for-1 stock split that will become effective at the end of the trading session on June 7.