US employment, European prices and Broadcom: what to watch out for for investors this week

The rally in Wall Street stocks, the longest since 2023, will be put to the test later this week when the May United States jobs report is released. The publication of fresh data on business activity in industry and services may also influence future decisions by the U.S. Federal Reserve on interest rates, writes The Wall Street Journal.

In Europe, investors will be watching the eurozone inflation: the market has already put in quotations almost full probability that the ECB will raise rates at the meeting in June. A separate topic is the unblocking of the Strait of Hormuz: progress in peace talks between the US and Iran may bring down oil prices, states WSJ.

Wall Street's reporting season is almost over, with less than 20 companies in the S&P 500 set to report first-quarter results. Of those that have already reported, nearly 90% exceeded earnings forecasts and more than 80% exceeded revenue forecasts, according to Barron's. This week, chip developer Broadcom, one of six U.S. companies valued at more than $2 trillion, cybersecurity leaders Palo Alto Networks and CrowdStrike, and retailers Dollar General, Five Below and Macy's will release earnings data.

On Monday, June 1, ISM will release the May U.S. manufacturing business activity index (PMI): the consensus forecast is 53.1 points, slightly above April's level.

In the eurozone, industrial PMI for May will be released, as well as April unemployment and money supply data.

Financial results will be presented by Hewlett Packard.

On Tuesday, June 2, the U.S. Bureau of Labor Statistics will release its JOLTS report on job openings and turnover, with economists expecting 6.85 million available jobs as of the last business day of April, down from March.

The main event in the Eurozone is the preliminary estimate of May inflation (CPI). As Investec analyst Sandra Horsfield notes, this is "one of the last key indicators that the European Central Bank will receive before its June meeting". It will be held on June 11, and money markets estimate the probability of a 0.25 percentage point rate hike at 93%.

Dollar General, Palo Alto Networks and Ulta Beauty will release quarterly earnings.

On Wednesday, June 3, ISM will release the May ISM index of business activity in the services sector: 53.9 points are expected, also slightly above the April value. For the fourth time this year, the Fed will publish the Beige Book, a review of current economic conditions in the US based on data from 12 regional reserve banks.

In the eurozone, the services PMI for Ma and the April producer price index will be released.

The corporate calendar includes reports from Broadcom, CrowdStrike, Five Below, Inditex and Macy's.

On Thursday, June 4, the eurozone will release retail sales data for April.

Ciena, Lululemon Athletica and Planet Labs will release quarterly results.

On Friday, June 5, the main macroeconomic event of the week is expected to be the May U.S. jobs report. Consensus estimates suggest a slowdown in non-farm job growth to 95,000 from 115,000 in April, with unemployment remaining at 4.3%.

Employment rose for two consecutive months in March-April for the first time since last Ma, easing fears of a deteriorating labor market. New signs of its resilience could reinforce expectations of an interest rate hike. But if it turns out that the crisis in the Middle East is already having a negative impact on hiring in the world's largest economy, such forecasts could weaken, WSJ points out.

This article was AI-translated and verified by a human editor