What to see in the markets, week of May 31

A rebound in US stocks last week snapped a seven-week losing streak for the S&P 500 and the Nasdaq, while the Dow posted gains for the first time in eight weeks.

These gains ended the longest weekly losing streak in more than a decade for the S&P 500 after the index tiptoed into bear market territory. All three major indices posted weekly gains of at least 5%, buoyed by a string of upbeat economic data and more positively received earnings reports from the retail sector.

The S&P 500 has snapped a losing streak of this length only three other times in history (1970, 1980 and 2001) and twice the index rose 33% over the next 12 months. according to LPL Financial data.

“Of course, to keep things honest, [performance after] the [decline] in 2001 it was tough to sled,” said LPL’s Ryan Detrick; over the next 6 months, the S&P 500 fell another 14%.

Wall Street will be free on Monday in observance of the Memorial Day holiday.

Investors are expected to take a cue from a flurry of key jobs data in the last holiday-shortened week of May, when trading resumes on Tuesday.

The closely watched jobs report from the Labor Department will offer a snapshot of US employment as concerns mount over the uncertain economic outlook. May jobs data is expected to reflect a slowdown in hiring from a previous red-hot reading of 428,000 jobs, with economists looking for 325,000 jobs added or created last month, according to Bloomberg consensus estimates.

With several big-name companies reporting inflation-related earnings pressures and seeing their shares slide in recent weeks, market participants have become wary that companies may lay off workers and pause hiring to cut costs.

A Now Hiring sign at TJ Maxx in Annapolis, Maryland on May 16, 2022. (Photo by Jim WATSON/AFP) (Photo by JIM WATSON/AFP via Getty Images)

On the jobs front, investors also have ADP’s report on private payrolls, a precursor to the government’s main jobs report, the Department of Labor’s Job Vacancies and Job Turnover Survey, or JOLTS, and weekly jobless claims in The tail.

The consumer sentiment index to be released on Tuesday will serve as another important gauge of economic sentiment, with investors keeping a close eye on consumer resilience amid continued recession talk.

In recent trading days, a favorable batch of quarterly results from major retailers helped, at least temporarily, allay concerns about the effect inflationary headwinds could have on profit margins.

“Based on their earnings, coupled with other trends like declining consumer confidence and real incomes, the consumer suddenly seemed much more vulnerable,” Brad McMillan, chief investment officer at Commonwealth Financial Network, said in a note. “As the consumer goes, so does the economy and ultimately the market.”

NEW YORK, NEW YORK - MAY 23: Traders work on the floor of the New York Stock Exchange (NYSE) on May 23, 2022 in New York City.  After a week of heavy losses, markets rallied on Monday morning.  (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MAY 23: Traders work on the floor of the New York Stock Exchange (NYSE) on May 23, 2022 in New York City. After a week of heavy losses, markets rallied on Monday morning. (Photo by Spencer Platt/Getty Images)

In fact, if the company’s forecasts pan out, macroeconomic pressures are likely to show up more significantly in second quarter results.

The term “inflation” was mentioned at least once during 398 earnings calls made by S&P 500 companies from March 15 to May 24, FactSet research indicated, with a similar number, 338, mentioning “supply chain “In roughly the same period.

Additionally, the S&P 500 reported earnings growth of 9%, the lowest since the fourth quarter of 2020, and 68 companies tracked by the index provided negative EPS guidance for the first quarter, the highest since the quarter of 2020. year-end 2019, according to FactSet.

“If the economy approaches the recession door, layoffs will rise even higher and it is too early to rule out more job cuts in the coming weeks and months,” Christopher Rupkey, chief economist at FWDBONDS, said in a recent note. “High-flying tech companies have seen their share prices plummet, which will force management to tighten their belts, and the biggest expense for most companies is always labor.”

Earnings season is drawing to a close, but more reports will be released in the four-day week, with companies like Salesforce.com (CRM), GameStop (GME) Chewy (CHWY), and HP (HPQ) set to report quarterly results. .

“This is nothing more than a bearish bounce in our view,” Eddie Ghabour, co-founder and managing partner of Key Advisors Group, told Yahoo Finance Live. “When you look at these rebounds that we’ve had, they’ve been on very light volume, there’s not a lot of conviction.

Ghabour also explained that the data that resulted in strong stock sales in recent weeks was data from the first quarter, and that the current quarter’s numbers may be worse, warning of a “very treacherous market in the coming months.”

economic calendar

Monday: Memorial Day. There are no notable reports scheduled for publication.

Tuesday: FHFA Home Price Indexmonth to month, March (2.0% expected, 2.1% during the previous month); Home Price Purchase Indexquarter over quarter, Q1 (3.3% over the previous quarter); S&P CoreLogic Case-Shiller Composite of 20 Citiesmonth over month, March (1.90% expected, 2.39% during the previous month); S&P CoreLogic Case-Shiller Composite of 20 Citiesyear over year, March (19.85% expected, 20.20% during the previous month); S&P CoreLogic Case-Shiller US National Home Price Indexyear over year, March (19.80% over the previous month); NMI Chicago PMIMay (55.5 expected, 56.4 during the previous month); Conference Board Consumer ConfidenceMay (103.5 expected, 107.4 during the previous month); Conference Board Current StatusMay (152.6 during the previous month); Conference Board ExpectationsMay (77.2 during the previous reading); Dallas Fed Manufacturing ActivityMay (1.5 expected, 1.1 during the previous month)

Wednesday: MBA Mortgage Applicationsweek ended May 27 (-1.2% during the previous week); S&P Global US Manufacturing PMIend of May (57.5 expected, 57.5 during the previous month); construction spendingmonth over month, April (0.6% expected, 0.1% over the previous month); ISM ManufacturingMay (54.5 expected, 55.4 during the previous month); ISM prices paidMarch (80 expected, 84.6 previous month); New ISM OrdersMay (53.5 during the previous month); ISM JobsMay (50.9 during the previous month); JOLTS job offersApril (11.4 billion expected, 11.549 million during the previous month); Total Vehicle Sales WARDSMay (14.30 million expected, 14.29 million the previous month); Federal Reserve Publishes Beige Book

Thursday: Challenger job cutsYoY, May (6.0% over the previous month); ADP Job ChangeMay (300,000 expected, 247,000 during the previous month); Non-agricultural productivityFinal Q1 (-7.5% expected, 7.5% during the previous month); Unit labor costs Q1 final (11.6% expected, 11.6% final); unemployment claimsweek ending May 28 (210,000 expected, 210,000 during previous week); ongoing claimsweek ending May 21 (1.346 million expected, 1.346 million during the previous week); Factory orders excluding transportationApril (2.5% during the previous month, revised to 2.1%); factory ordersApril (0.7 expected, 2.2% over the previous month, revised to 1.8%); Durable Goods Ordersend of April (0.4% expected, 0.4% during the previous month); Durable goods, excluding transportationend of April (0.3% during the previous month); Non-defense capital goods orders, excluding aircraftend of April (0.3% during the previous month); Shipments of non-defense capital goods, except aircraftend of April (0.5% expected, 0.8% during the previous month)

Friday: Change in Non-Farm PayrollsMay (325,000 expected, 428,000 during the previous month); Change in Private PayrollMay (303,000 expected, 406,000 during the previous month); Change in manufacturing payrollMay (37,000 expected, 55,000 during the previous month); Unemployment rateMay (3.5% expected, 3.6% during the previous month); Average earnings per hourmonth over month, May (0.4% expected, 0.3% during the previous month); Average earnings per houryear over year, May (5.2% expected, 5.5% the previous month); Average weekly hours All employeesMay (34.6 expected, 34.6 during the previous month); Labor force participation rateMay (62.3% expected, 62.2% during the previous month); Underemployment rateMarch (7.0% previous month); S&P Global Manufacturing PMIend of May (53.5 expected, 53.5 during the previous month); S&P Global US Composite PMIend of May (53.8 expected, 53.8 during the previous month); ISM Services Index (56.5 expected, 57.1 during the previous month)

earnings calendar

Monday

Memorial Day. There are no notable reports scheduled for publication.

Tuesday

Before the opening of the market: from kirkland (CHURCH)

After market close: hp (HPQ), salesforce.com (CRM), victoria’s secret (VSCO), charging point (CHPT), Amberella (AMBA)

Wednesday

Before the opening of the market: There are no notable reports scheduled for publication.

After market close: gamestop (GME), Tough (CHWY), HPV (HVP), Hewlett-Packard Companies (HPE), pure storage (PSTG), american superconductor (AMSC)

Thursday

Before the opening of the market: Hormel Foods (HRL)

After market close: Lululemon (LULU), okta (OKTA)

Friday

There are no notable reports scheduled for publication.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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