The day ahead, Friday February 1st

What a strange day yesterday proved to be.  The S&P and NASDAQ saw solid gains, but the Dow Jones industrials and Transportation indices were down on the day.  The markets are up 15% in a straight line and have seen a “v” bottom since the 12/24 bear market low.  Friday will feature a couple major data releases that are sure to bring some increased speculation on an economic slowing and future Fed policy.

At 8:30 A.M. EST, the January Employment Report will be released. Following a record 312,000 new jobs in December, expectations are for a gain of 165,000 jobs for January. Consensus expectations are for the Unemployment Rate to remain unchanged at 3.9%, while average hourly earnings are expected to rise by +0.3% m/m and +3.2% y/y, compared to +0.4% and +3.2% in December.

At 10:00 A.M. EST, the ISM Manufacturing Index for the month of January is due out. Current expectations are for a release of 54.2, compared to 54.1 in December. The ISM index saw a sharp drop in December on the back of China trade war fears and the market swoon.  Investors are going to have to get used to weakening data that doesn’t necessarily negatively equate to downside in stocks because it means a more dovish Fed.

Also at 10:00 A.M. EST, the final release for the University of Michigan Consumer Sentiment for the month of January is due out. It is not expected to change from the initial release of 90.7. Consumer Sentiment and Confidence has finally started to drop due to the stock market volatility and government shutdown.

Friday will be relatively quiet in terms of earnings releases. Chevron will report before market open, with current expectations for $1.87 EPS. In addition, Cigna (before open, EPS expectation: $2.42) and Exxon Mobil Corp (Not specified, EPS Expectation: $1.08) will report earnings.

All EPS expectation data is from Fidelity and accurate as of 1/30/2019. All economic data information is from Bloomberg and accurate as of 1/30/2019.