What to Expect in the Markets this Week

Market watchers will get a better look at the labor market this week, starting with reports on job openings on Tuesday, the private payroll report from ADP on Wednesday, weekly initial jobless claims on Thursday, and the U.S. unemployment report on Friday.

Investors will also get other economic updates, including the latest factory order figures, revisions to U.S. third-quarter productivity, October U.S. trade deficit data, and wholesale inventories. More data about the consumer will also become available, including the Federal Reserve’s monthly report on consumer credit and the December preliminary results for the Michigan Consumer Sentiment Index.

A Wednesday event to launch Advanced Micro Devices’ (AMD) new MI300 data center GPU chip will be the latest in a series of advanced chip designs that are focused on processing data for artificial intelligence (AI) applications. Other tech companies will hold events this week, including annual shareholder meetings for Microsoft (MSFT) and Cisco Systems (CSCO).

Week of Dec. 4:

Monday, Dec. 4

• SAIC (SAIC) and Gitlab (GTLB) release earnings
• MGM Resorts International (MGM) BetMGM business update event
• Factory orders (October)

Tuesday, Dec. 5

• AutoZone (AZO) releases earnings
• Johnson & Johnson (JNJ) enterprise business review event
• ISM services (November)
• Job openings (October)

Wednesday, Dec. 6

• Chewy (CHWY), GameStop (GME), and C3 (AI) release earnings
• Cisco Systems (CSCO) annual shareholder meeting
• Advanced Micro Devices (AMD) “Advancing AI” MI300 data center GPU chip launch
• ADP employment (November)
• U.S. productivity (3Q Revisions)
• U.S. trade deficit (October)

Thursday, Dec. 7

• Broadcom (AVGO), Lululemon (LULU), and Dollar General (DG) release earnings
• Microsoft (MSFT) annual shareholder meeting
• Domino’s (DPZ) investor day
• Initial jobless claims (week ending Dec. 2)
• Wholesale inventories (October)
• Consumer credit (October)

Friday, Dec. 8

• Consumer sentiment (December preliminary)
• U.S. employment report (November)

Fed Looking at Job Numbers to Gauge Inflation Fight

After another drop in inflation last week, market watchers will be looking at a slew of labor market data this week to determine if the job market remains resilient in the face of the Federal Reserve’s interest rate hikes. The improving inflation figures show that the Fed’s rate hikes are having an effect. The next step will be to make sure that the higher-rate environment doesn’t affect employment too negatively.

Last month’s employment figures also suggested that things were moving in the right direction for the Fed. The October report showed that employers added 150,000 jobs over the course of the month, about 20,000 fewer than economists expected. It followed a hot September jobs report indicating that employers added 297,000 jobs, which raised worries that continued strength in the labor market would keep inflation elevated. Last month’s report also showed that hourly earnings rose 0.2%, the smallest increase since February 2022 and another indication that inflation may be cooling.

Federal Reserve officials will be looking for more sustainable job growth when the Bureau of Labor Statistics releases the November employment data on Friday. In addition to the number of jobs added, market watchers will also be paying attention to hourly wage growth data and the overall unemployment rate, which last month ticked up to 3.9%.

Meme Stock GameStop Looking to Improve Momentum

After posting narrower-than-expected losses during its quarter ending in July, the original “meme stock” GameStop (GME) will look to keep momentum going when it reports earnings on Wednesday. In its previous report, the retailer showed that it was increasingly relying on virtual sales and digital downloads as the industry shifts away from physical copies of video games. It will be the first earnings report since the video game retailer elevated activist investor Ryan Cohen to the position of CEO and president.

Shares of GameStop gained about 25% last week to trade higher than $15 a share in advance of the earnings report. In 2021, a frenzy of retail investors pushed the stock’s share price to nearly $500, causing massive losses for hedge funds that had short sales on the stock.

New AMD Chip Launch to be Latest AI Chip Development

At its “Advancing AI” event on Wednesday, AMD will unveil its MI300 data center graphical processing unit (GPU) chip, designed to power AI applications and platforms. A release for the event said it would “highlight the company’s growing momentum with AI hardware and software partners.”

AMD is a competitor of Nvidia (NVDA), which last week was the subject of reports that it would delay the release of a set of AI chips designed to meet U.S. export rules for Chinese companies. Other tech companies are also holding events this week, including annual shareholder conferences for Microsoft and Cisco Systems.