Welcome to this week’s market breakdown! If you are just getting interested in the stock market, you picked a fascinating week to tune in.
Right now, we are transitioning away from the peak of "earnings season" (when companies release their quarterly report cards) and stepping into a "Big Macro" week. Macro simply refers to the big-picture economic data that tells us how the overall economy is breathing.
Here is exactly what I am watching this week and why it matters to our money.
The Economic Pulse: Tracking Jobs and Costs
This week, the data is all about industrial health and labor costs. If you want to know where inflation is heading, this is the data you watch.
Monday (Mar 2) - Manufacturing PMI: Think of this as a massive survey of supply chain managers. Are they buying more materials or fewer? I pay close attention to the "Prices Paid" section here. If it spikes, it means raw material costs (like steel, lumber, and fuel) are going up, which eventually hits our wallets.
Wednesday (Mar 4) - Services PMI & ADP Jobs: The services sector makes up the massive majority of the US economy. We also get a sneak peek at private payroll numbers today to see if companies are still hiring.
Friday (Mar 6) - The Official Jobs Report: This is the main event of the week. Economists expect roughly 60,000 to 130,000 new jobs were created last month. If the unemployment rate ticks up from 4.3%, the "recession" whispers will get louder. If wage growth is too high, the Federal Reserve might keep interest rates higher for longer to fight inflation.
The Heavyweight Earnings
Even though the bulk of earnings season is over, we still have some massive companies opening their books this week. I use these as health checks on different parts of the economy.
Target ($TGT) & Costco ($COST): Target reports on Tuesday and Costco on Thursday. I watch these two closely because they are the ultimate reflection of the middle-class consumer. Are people still buying discretionary items, or are they sticking strictly to groceries and essentials?
CrowdStrike ($CRWD): Reporting Tuesday, this is the gold standard for cybersecurity. It tells us if big corporations are still heavily investing in protecting their digital infrastructure.
Broadcom ($AVGO): Reporting Wednesday, this is the "other" Artificial Intelligence giant alongside Nvidia. Their forward guidance is a massive catalyst for the entire tech sector.
Hidden Market Movers
As you learn the markets, you'll realize that sometimes stocks move not because of news, but because of "plumbing" issues behind the scenes.
ETF Rebalancing: Certain funds are forced by their own rules to buy or sell massive amounts of stock early this week to readjust their weightings. This can create weird, temporary price swings that have nothing to do with a company's actual value.
Treasury Auctions: On Tuesday and Wednesday, the US Government is auctioning off short-term debt to fund operations. When the government vacuums up billions in cash from the financial system to buy these bonds, it can temporarily drain liquidity from the stock market, sometimes causing brief afternoon dips.
Global Headwinds
Finally, I always keep one eye on the rest of the world. This week, Chinese officials are holding their "Two Sessions" meetings to set their GDP targets for the year. Any mention of aggressive economic stimulus over there will likely send US-listed Chinese tech stocks and commodities (like copper) soaring.
That is the blueprint for the week! Keep an eye on Friday's jobs report, and stay disciplined out there.