The late American author and screenwriter Ray Bradbury once made a very funny comment on facts and theories.
“Facts quite often, I fear to confess, like lawyers, put me to sleep at noon. Not theories, however. Theories are invigorating and tonic. Give me an ounce of fact and I will produce you a ton of theory by tea this afternoon. That is, after all, my job.”
Last weekend, a very highbrow aim of “Fostering a Dynamic Global Economy” was the main central banker theme at the Jackson Hole summit. In the Global Week Ahead, everyday traders can gauge for themselves. Have the world’s major central bankers been paying attention to the pedestrian facts?
Here is what risk market participants can learn — from looming macro data — for each key region.
The United States
The Federal Open Market Committee (FOMC) always says its rate hike decisions are “data dependent.” The most important data of all, the monthly job additions data, comes out this week.
On Wednesday, ADP private payrolls for August arrive.
On Friday, U.S. Nonfarm payroll additions for August hit the tape — just before a long Labor Day weekend. The federal labor market data has risen over +200K in five of the seven months in 2017. Look for another solid month.
Also, watch annual U.S. wage growth figures, and the U.S. household unemployment rate, which has been at 4.3%.
Continued increases in the Eurozone core inflation reading — towards the +2.0% target — will be needed to get the European Central Bank (ECB) to reduce the pace of its monthly bond purchases further.
On Thursday, Eurozone consumer inflation rates for August arrive, along with reports from France and Italy. Germany and Spain reports hit the day before.
Eurozone non-core inflation has sunk back from a peak of +2.0% y/y in February to +1.3% in June. It stabilized last month.
Still, the Eurozone’s core inflation rate has been gently trending higher. From a recent low of +0.7% y/y in March, their core inflation reached +1.2% y/y in July.
This broad core inflation reading is stronger than at any point in the last 4 years.
Lastly, dive into Asian macro data. This region is all about showing traders stronger expansions than anywhere else in the world. But these haven’t been that strong of late.
We get 2 big macro growth updates from Asia’s two major countries this week.
On Thursday, Mainland China’s official purchasing manager indices (PMIs) for manufacturing and services arrive. A 51 print (1 notch above the 50 rubicon that’s expansion) has been the norm for China’s manufacturing economy. The services growth has been better.
On Friday, the smaller private Caixin manufacturing PMI is out.
Is India’s economy slowing? Q1 GDP growth was a weak +6.1%. We get the Q2 data for India on Thursday.
Three Top Zacks #1 Rank (STRONG BUY) Stocks—
Toyota Motor (TM - Free Report) : This is the $167 billion market cap Japanese automaker. This large-cap stock gets a Zacks long-term Value score of A and a Growth score of B.
NVIDIA (NVDA - Free Report) : This is the darling stock of the momentum traders, and the leader of the semiconductor revolution going on, inside the “Internet of Things.”
The stock is now an incredible $99 billion in market cap. The long-term Zacks VGM score is a predictable F. If you have just arrived here, you are late to the game, for sure.
Regeneron (REGN - Free Report) : This is the $51 billion market-cap stock that is the darling of biotech growth buyers. Again, there’s a predictable long-term Zacks VGM score of D.
But the stock has sold off recently, and might be ready to move up from here.
Key Global Macro—
On Monday, the unemployment rate in Japan is 2.8%.
On Tuesday, a preliminary GDP growth number for France comes out. The prior y/y rate was +1.8%.
The S&P Case-Shiller Home Price index comes out. The prior reading was +5.69% y/y.
The Fed’s Evans speaks in Chicago.
On Wednesday, the unemployment rate in Hungary is a surprisingly low 4.3%. We get updated on where it moves to next.
The flash HICP inflation rate for Spain comes out. The prior reading was +1.7% y/y.
The U.S. APD payroll survey for August hits the tape. The prior reading for July was +178K.
Net Debt (as a % of GDP) is a surprisingly low 50% in Brazil.
On Thursday, the Bank of Korea gives up a fresh rate decision. The prior reading was 1.25%.
The China manufacturing PMI comes out. The prior reading was 51.4.
The unemployment rate in Germany is 5.7%. In Italy, it is 11.1%. We get fresh numbers for both.
The flash HICP inflation rate for the Eurozone comes out. Look for +1.2% y/y.
India’s GDP growth rate has fallen back to +6.1% y/y. We get an update.
U.S. initial claims were a low 234K in July. We get an update.
On Friday, the China Caixin smaller private company manufacturing PMI index comes out. The prior was 51.1.
Interestingly, the manufacturing PMI for India comes out. The prior reading was 47.9. That is a contraction number.
The manufacturing PMI for the Eurozone comes out. The prior read was a high 57.4.
U.S. non-farm payroll for August hits the tape. Look for +209K on job additions for the month and a 4.3% unemployment rate.
Brazil Q2 GDP growth rate comes out. After a solid Q1 print of +1.0% q/q — which followed eight consecutive quarterly declines — negative Q2 growth is forecast.