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This is a U.S. non-farm payroll week.
Friday’s monthly U.S. jobs data always trumps other global-macro inputs. Likely, the U.S. jobs data in September bounces. Soft seasonal August data should get trumped by a swifter pace in early fall hiring. On top of that, other U.S. labor market indicators this week also look solid. Pundits on any September job call forecast no worry.
Are you worried about what the Fed does in December? Guess what? This week may resolve your ongoing concerns. Nearly the entire FOMC is speaking out publicly this week, either on Monday, Wednesday and Friday.
Outside the U.S., Thursday look to be a big day in this Global Week Ahead.
The signals?
Markit and its pundit competitors release manufacturing PMI data. At one stroke, global investors get an update. A surprise here, a strong up or down indicator –particularly from China on its manufacturing PMI– could be the stroke of macro fact moving global share markets the most this week.
Global PMI Sweep
Asia–
The key number could be the release of the China PMI for manufacturing. Markets look for a 49.7 number, in line with the prior reading. As I have written, a surprise here, either up or down, will jolt markets.
- The Caixin/Markit services PMI looks to be 51.7, up from a prior 51.5.
- The Caixin manufacturing PMI looks to be 47, in line with the prior.
Europe–
The Eurozone manufacturing PMI looks to be 52, the same as before.
There is a host of European country manufacturing PMIs out. Spain looks for 52.9, France 50.2, Germany 52.5, and Italy 53.3. All large country European PMIs are slightly worse than prior, but still strong.
North America–
The U.S. final manufacturing PMI looks to be 53. The ISM manufacturing looks to be 50.6, worse than the prior 51.1. Mexico’s manufacturing PMI looks to be 52.2, lower than the prior 52.4.
For stocks outside the U.S., it might be time to act contrarian. Study a beaten down materials or industrial stock.
I like the recent Zacks #1 Rank tied to NSK Ltd. (NPSKY), a metal processing and fabricating company.
NSK inaugurated its business in 1916 and produced the first ball bearings made in Japan. Since then, NSK has developed a full range of bearings, which has been sold throughout the world, and has contributed greatly to the development of industries and the advancement of technology. Today, NSK is the No.1 manufacturer of bearings in Japan, and the No.3 manufacturer all over the world.
The stock is down below $20 a share, down big from a high at $33 a share seen a couple months ago.
A U.S. competitor Global B&C (BRSS), also looks good. It holds a recent Zacks #1 Rank.
Global Brass & Copper Holdings, Inc. is a converter, fabricator, distributor and processor of copper and brass products primarily in North America. The Company's product include sheet, strip, foil, rod, tube and fabricated metal component that it sells under the Olin Brass, Chase Brass and A.J. Oster brand names.
Both stocks carry an A in Zacks Value. No surprise there. That is the metric showing the beaten-down state of affairs.
In the U.S., if you don’t want to be contrarian, also take a look at Delta Air Lines (DAL).
The Global Week Ahead
On Monday, the U.S. core PCE inflation index comes out. Look for +0.1% m/m. Personal income should be up +0.4% m/m, and personal spending up +0.3% m/m.
The Mexican unemployment rate looks to be 4.7% in non-seasonally adjusted and 4.3% in seasonally adjusted terms.
The Fed’s Evans speaks in Milwaukee and the Fed’s Williams speaks at UCLA.
On Tuesday, the Reserve Bank of India (RBI) announces its interest rate decision.
The flash HICP for Spain looks to be +1% m/m, a turnaround from -0.4% m/m. The flash CPI looks to be -0.5% y/y, no better than the -0.4% y/y data before it.
Spanish retail sales look to be up +3.2%, down from a prior +4.1% y/y mark.
The Eurozone economic sentiment index looks to be 104.1, in line with the prior 104.2. The Industrial sentiment index looks to be -3.8, in line with the prior -3.7.
The Brazilian unemployment rate looks to be 8.5%, worse than the prior 8.3%. Brazil’s central government budget gets worse too, now at -10.9 billion Brazilian reals, worse than -7.2 billion prior.
The German HCIP rate looks to be -0.1% m/m, worse than the prior 0 m/m rate.
The S&P Case-Shiller Home Price Index looks to be 5.15% y/y.
U.S. Consumer Confidence looks to be 96, down from a prior 101.5.
Japan’s retail sales look to be up +0.5% y/y, down from a prior +1.4% y/y.
The EU’s Hollande and Juncker speak in Paris.
On Wednesday, Japan’s housing starts look to be up +7.6% y/y, better than a prior +7.4% y/y number.
German retail sales look to be up +3.3% y/y, in line with the prior number.
France’s consumer spending looks to be up +1.7% y/y, better than the prior +1.4% y/y rate prior. The PPI could be back to 0, better than a prior 01.6% y/y rate. The final GDP could be +0.9%.
The German unemployment rate looks to be 6.4%, the same as before.
The 3rd estimate for GDP in the U.K. looks to be +2.6% y/y.
The Eurozone unemployment rate looks to be 10.9%. The Eurozone flash HICP looks to be +0.9% y/y.
Italy’s HICP in a preliminary reading looks to be +0.3% y/y, better than the prior +0.2% y/y reading.
The U.S. ADP payroll number looks to be 190K, the same as before.
The Chicago PMI looks to be 53, about the same as the prior 54.4.
The BoJ Tankan Report is released.
The Fed’s Dudley speaks in NYC. The Fed’s Bullard and Yellen speak in St. Louis.
On Thursday, the important China PMI for manufacturing will be released.
Markets look for a 49.7 China number, in line with the prior reading. The Caixin/Markit services PMI looks to be 51.7, up from a prior 51.5. The Caixin manufacturing PMI looks to be 47, in line with the prior number.
There is a host of European country manufacturing PMIs out. Spain looks for 52.9, France 50.2, Germany 52.5, and Italy 53.3. All are slightly worse than prior, but still strong.
The Eurozone manufacturing PMI looks to be 52, the same as before.
The U.S. final manufacturing PMI looks to be 53. The ISM manufacturing looks to be 50.6, worse than the prior 51.1.
Mexico’s manufacturing PMI looks to be 52.2, lower than the prior 52.4.
U.S. vehicle sales look to be 17.5 million units, in line with a prior 17.72 million units. The U.S. initial claims number looks to be a strong 272K.
On Friday, the Eurozone PPI look to be -2.4% y/y, worse than the prior -2.1% y/y reading.
U.S. non-farm payrolls look to be +202K in September, better than the prior +173K August reading.
The Fed’s Rosengren, Kocherlakota, Mester, and Fischer speak in Boston.
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