Investing.com -- It’s set to be an action-packed week in markets with U.S. jobs and GDP data along with a slew of big tech earnings. With markets in the final stretch before the U.S. presidential election plus the Federal Reserve’s November meeting volatility looks set to continue. Here's your look at what's happening in markets for the week ahead.
- Nonfarm payrolls
Friday’s employment report is expected to show that jobs growth slowed to a more modest 111,000 in October, reflecting the impact of strikes (at Boeing (NYSE:BA), Textron (NYSE:TXT), and Hilton Hotels) and weather-related disruptions from Hurricane Helene and Milton. The unemployment rate is forecast to remain unchanged at 4.1%.
The Fed has already telegraphed its intention to cut interest rates by 25 basis points at its November meeting after delivering a 50-bps cut in September, but this week’s economic data could still have some bearing on that decision.
While Fed officials will likely look through temporary factors affecting payroll’s numbers, Tuesday's JOLTS data for September and Thursday's report on initial jobless claims will be closely watched for any signs of softening in the labor market.
- GDP data
The other major data releases that the Fed will pay close attention to in the coming week are Wednesday’s first estimate of third quarter gross domestic product and Thursday's report on personal income and spending, which contains the central bank’s preferred inflation measure, the core PCE price index.
Economists are expecting the economy to have expanded at a solid 3% annual rate, matching the rate of growth in the previous quarter.
The economic calendar also features October data on consumer confidence and business sentiment, a report on pending home sales and the Institute for Supply Management is to release its October manufacturing index.
Fed officials will be in a communications blackout ahead of the November 7 policy meeting.
- Megacap earnings
Five of the "Magnificent Seven" tech stocks that have played an outsize role in driving market gains over the past couple of years are set to report in the coming week.
Google parent Alphabet (NASDAQ:GOOGL) is due to report on Tuesday, followed by Microsoft (NASDAQ:MSFT) and Facebook parent Meta Platforms (NASDAQ:META) on Wednesday and Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday.
The companies have a huge influence on markets because of their massive market values. They jointly account for 23% of the weight of the S&P 500, meaning market reaction to their results could sway broader indexes in the days ahead.
Tesla (NASDAQ:TSLA), the first of the Magnificent Seven to report results, saw its shares surge on Thursday after CEO Elon Musk said he expects vehicle sales to grow 20% to 30% next year.
Taken together, the companies have posted much stronger profit growth than the rest of the S&P 500, but that gap is expected to close in coming quarters.
- Market swings
This week will be the final full week in markets ahead of the Nov. 5 U.S. presidential election and the Fed’s next monetary policy decision on Nov. 7, which means investors will likely remain on edge.
Republican presidential candidate Donald Trump and his Democratic rival, Vice President Kamala Harris are tied in national and swing state polling, but former president Trump has improved his margins in recent weeks. The former president is also a slight favourite in election prediction markets.
"Investors should expect market volatility in the lead-up to the U.S. presidential election," analysts at UBS Global Wealth Management said in a note on Thursday. As Nov. 5 "inches closer, market sentiment is likely to stay vulnerable."
- Oil prices
Oil prices are likely to fall when trading resumes on Monday after Israel's retaliatory strike on Iran over the weekend bypassed Tehran's oil and nuclear infrastructure and did not disrupt energy supplies.
Brent and U.S. West Texas Intermediate crude futures gained 4% last week in volatile trade as markets priced in uncertainty around the extent of Israel's response to the Iranian missile attack on Oct. 1 and the upcoming U.S. election.
Iran on Saturday downplayed Israel's air attack against Iranian military targets, saying it caused only limited damage.
Meanwhile, energy traders are awaiting more clarity on China's stimulus policies, though analysts do not expect such measures to provide a major boost to oil demand.
-Reuters contributed reporting