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Friday's Non-Farm Payroll Report Will Take Center Stage
Watch European Oil Companies Earnings Reports This Week
Global Central Banks Will Be Worth Attention, As Well
What happens across this Global Week Ahead?
On Friday, the latest April U.S. Federal non-farm jobs data arrives.
There's plenty of market trends and events for traders to mull over, in coming days:
From high oil prices, and the conflict in the Middle East, to
Japan's yen
An Australian rate decision, and
A U.K. local election
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) On Friday, the crucial U.S. nonfarm jobs report for April comes out.
As the U.S. economy grapples with fallout from the Middle East war, Wall Street's radar turns to Friday's April monthly payrolls report.
The U.S. economy likely created 73,000 new jobs, economists polled by Reuters forecast. In March, payrolls increased by 178,000, the most since December 2024, but that followed a sharp decline in February.
The U.S. employment data comes amid signs of hawkishness at the Federal Reserve, as Donald Trump pick Kevin Warsh prepares to take over as chair with the U.S. president keen on rate cuts.
The Fed held rates steady on Wednesday, as expected, but three policymakers dissented because they thought language in the policy statement pointing to an "easing bias" was no longer appropriate — indications that the Fed faces hurdles to cut rates this year.
(2) Major energy companies report & likely raise European earnings estimates.
On aggregate, European earnings are likely to show robust growth of +3.2% in Q1, according to LSEG I/B/E/S.
Under the surface, it's a little bit more complicated.
Growth is expected to be driven by just three sectors: financials, tech and energy. The latter is seen as the biggest beneficiary of the Iran war due to higher oil and gas prices.
But if the war, and energy surge, persist, the overall outlook for Europe's earnings could turn.
For now, this reporting season might be too early for that to be reflected in company guidance, but it's one to watch in coming months.
And it's perhaps a reason why investors have turned their attention back towards surging U.S. stocks.
(3) Global oil prices are rising. Again.
Oil prices are rising again, briefly vaulting back above $120 a barrel this week to the highest since 2022 (remember that?), as the war with Iran enters a third month.
While the U.S. and Iran face pressure to end a conflict that has shut the Strait of Hormuz, the world watches anxiously as the biggest ever disruption to energy supplies unfolds.
For each week the Strait is closed, keeping oil elevated, the greater the economic risks via higher inflation or weak growth or, for some, both. Oil importer Japan just intervened to prop up a yen that has been weakened by the conflict.
Global stocks are holding up, bolstered by strong earnings and AI, but surely that can't last as the war drags on?
A new month is now underway and some traders will be mindful of that old adage — "Sell in May and Go Away.”
(4) On Tuesday AEDT, the Reserve Bank of Australia Sets its Policy Rate. A 3rd hike?
The Reserve Bank of Australia's decision on Tuesday for a potential third straight rate hike may come down to the wire, with the inflation picture and Middle East conflict no clearer than at its prior meeting.
The RBA raised its key rate 25 basis points to 4.1% in March after a 5-4 vote, the tightest margin since it started releasing breakdowns last year. Meeting minutes showed concerns about the length of the war were top of mind as rate-setters balance inflation and economic risks.
Another hike would raise the RBA's rate to a post-pandemic high and undo all of last year's rate cuts.
Governor Michele Bullock stressed the split-reflected timing rather than direction, with all board members agreeing further tightening was necessary.
Markets anticipate an 80% chance of a hike, slightly lower than before Wednesday's cooler-than-forecast core inflation numbers.
(5) Municipal elections happen in the U.K.
Thursday's municipal elections in Britain, usually a non-event for investors, could move markets in a big way, with opinion polls pointing to a heavy defeat for Prime Minister Keir Starmer's Labor Party.
Gilts have sold off this year at moments that threatened Starmer's political future.
He's struggling to justify his decision to appoint Peter Mandelson as Britain's ambassador to the United States, despite Mandelson's known ties to late U.S. sex offender Jeffrey Epstein.
A heavy defeat could spark more widespread demands for his dismissal among his own lawmakers, and stoke expectations of a successor more willing to run looser budgets. That would bring more bad news for British bonds.
The 10-year gilt is already the worst performer among G7 peers since the Iran war started on February 28th, by a wide margin.
Zacks #1 Rank (STRONG BUY) Stocks
Next are three Zacks #1 (STRONG BUY) large-cap stocks, benefiting last week, from fresh covering analyst earnings upgrades.
(1) Shell (SHEL - Free Report) : This is a $91 a share stock, with a market cap of $256.8B.
It is found in Zacks Oil & Gas Integrated - International industry. The stock holds a Zacks Value score of A, a Zacks Growth score of D, and a Zacks Momentum score of B.
F12M P/E: 9.1.
Image Source: Zacks Investment Research
Shell PLC operates as an energy and petrochemical company. It explores for and extracts crude oil, natural gas and natural gas liquids; markets and transports oil and gas; produces gas-to-liquids fuels and other products.
Shell PLC, formerly known as Royal Dutch Shell PLC, is based in The Hague, the Netherlands.
(2) Texas Instruments (TXN - Free Report) : This is a $281 a share manufacturing stock, with a market cap of $255.8B.
It is found in the Zacks Semiconductor - General industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of A.
F12M P/E: 37.
Image Source: Zacks Investment Research
Texas Instruments is an original equipment manufacturer of analog, mixed signal and digital signal processing (DSP) integrated circuits.
TI has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe.
Management's strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Analog products have been categorized into three: high performance analog, high volume analog and logic, and power management.
The Embedded Processing segment includes TI's OMAP, connectivity solutions, non-wireless DSPs and microprocessors.
The Other segment includes smaller semiconductor product lines, such as DLP products, RISC microprocessors and ASICs, calculators and other schoolroom tools, and royalties.
The company's products are sold in industrial, personal electronics, automotive, communications, enterprise and other end-markets.
(3) ABB (ABBNY - Free Report) : This is a $101 a share aluminum stock, with a market cap of $185.2B.
It is found in the Zacks Manufacturing - Electronics industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of A.
F12M P/E: 26.5.
Image Source: Zacks Investment Research
ABB is a leading technology company.
Its products and services can be used in automated manufacturing, providing digital solutions, electrification of industry and transport and enhancing productivity.
It reports business under 4 segments - Electrification, Robotics & Discrete Automation, Process Automation and Motion.
Electrification segment is responsible for the manufacture and sale of products and services, including low and medium voltage switchgear, control products, DIN rail components, wiring accessories and installation material for a plethora of applications.
Robotics & Discrete Automation: This segment includes the machine and factory automation solutions from the business of B&R and a wide-ranging robotics solutions and applications suite.
Process Automation: This provides control and plant optimization systems and automation products and solutions for optimizing the productivity of industrial processes.
Motion: The segment specializes in supplying motors, drives and generator products.
Key Global Macro
Friday’s April U.S. non-farm payroll report is the key macro data event.
On Monday, the Reserve Bank of Australia (RBA) looks set to hike its policy rate from 4.1% to 4.35%. There will be a presser.
On Tuesday, European Central Bank (ECB) President LaGarde gives a speech.
The U.S. ISM Services PMI for April comes out. The prior 54 reading should be matched, this time around.
On Wednesday, the U.S. ADP private payroll report for April comes out. 62K was the reading in the prior month.
On Thursday, the Euro Area retail sales report comes out. The prior data showed a +1.7% y/y expansion.
On Friday, U.S. nonfarm payrolls for April look to rise +73K, after a strong +178K in March. The household unemployment rate should stay quiet at 4.3%.
Conclusion
This week, Q1 earnings reports will also remain a major trader focus.
On April 30th, Zacks Research Director Sheraz Mian shared a Q1 EPS update —
The outlook for U.S. large-cap corporate earnings has received a material boost from the very strong quarterly results in the ongoing Q1 earnings season.
We should keep in mind, however, that the earnings picture was fairly strong coming into this reporting cycle already.
Zacks believes that it is — this broad-based and steadily improving earnings outlook — that is helping the market discount the drag from geopolitical headwinds.
Including all of this morning's results, we now have Q1 results from 288 S&P500 members, or 57.6% of the indexes total membership
Total earnings for these companies are up +24.4% from the same period last year on +11.2% higher revenues
77.4% beat EPS estimates and 77.8% beat revenue estimates
This is a materially showing from these 288 index members relative to what we have been seeing from this group in other recent periods. The outperforming is particularly notable in terms of earnings and revenue growth and the revenue beats percentage.
The Magnificent 7 companies have been in the spotlight at present following quarterly results from four of the group's members — Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , Meta (META - Free Report) and Microsoft (MSFT - Free Report) .
All of these Tech leaders came out with strong results, but the numbers from Google's parent Alphabet are truly impressive, outshining its mega- cap Tech peers that are also its competitors in the fast-emerging AI world.
The Alphabet report showed all-around strength in the company's businesses, but the momentum in Google's cloud computing unit has been very impressive
Amazon's results were also very strong, with continued momentum in its Amazon Web Services business unit
The Q1 quarterly results from these “Mag 7” members reconfirm these companies' leadership status.
This leadership reflects not only the enormous sums that these companies are deploying to build data centers and other AI infrastructure, but also their enormous earnings power.
Enjoy the trading week.
John Blank, PhD. Zacks Chief Equity Strategist and Economist
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Image: Bigstock
"Sell in May and Go Away?" Global Week Ahead
Key Takeaways
What happens across this Global Week Ahead?
On Friday, the latest April U.S. Federal non-farm jobs data arrives.
There's plenty of market trends and events for traders to mull over, in coming days:
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) On Friday, the crucial U.S. nonfarm jobs report for April comes out.
As the U.S. economy grapples with fallout from the Middle East war, Wall Street's radar turns to Friday's April monthly payrolls report.
The U.S. economy likely created 73,000 new jobs, economists polled by Reuters forecast. In March, payrolls increased by 178,000, the most since December 2024, but that followed a sharp decline in February.
The U.S. employment data comes amid signs of hawkishness at the Federal Reserve, as Donald Trump pick Kevin Warsh prepares to take over as chair with the U.S. president keen on rate cuts.
The Fed held rates steady on Wednesday, as expected, but three policymakers dissented because they thought language in the policy statement pointing to an "easing bias" was no longer appropriate — indications that the Fed faces hurdles to cut rates this year.
(2) Major energy companies report & likely raise European earnings estimates.
It's a big week for European earnings. Energy majors Shell (SHEL - Free Report) and Equinor (EQNR - Free Report) , Commerzbank (CRZBY - Free Report) and HSBC (HSBC - Free Report) , and defense stocks Rheinmetall (RNMBY - Free Report) , Leonardo (DRS - Free Report) and Renk all report.
On aggregate, European earnings are likely to show robust growth of +3.2% in Q1, according to LSEG I/B/E/S.
Under the surface, it's a little bit more complicated.
Growth is expected to be driven by just three sectors: financials, tech and energy. The latter is seen as the biggest beneficiary of the Iran war due to higher oil and gas prices.
But if the war, and energy surge, persist, the overall outlook for Europe's earnings could turn.
For now, this reporting season might be too early for that to be reflected in company guidance, but it's one to watch in coming months.
And it's perhaps a reason why investors have turned their attention back towards surging U.S. stocks.
(3) Global oil prices are rising. Again.
Oil prices are rising again, briefly vaulting back above $120 a barrel this week to the highest since 2022 (remember that?), as the war with Iran enters a third month.
While the U.S. and Iran face pressure to end a conflict that has shut the Strait of Hormuz, the world watches anxiously as the biggest ever disruption to energy supplies unfolds.
For each week the Strait is closed, keeping oil elevated, the greater the economic risks via higher inflation or weak growth or, for some, both. Oil importer Japan just intervened to prop up a yen that has been weakened by the conflict.
Global stocks are holding up, bolstered by strong earnings and AI, but surely that can't last as the war drags on?
A new month is now underway and some traders will be mindful of that old adage — "Sell in May and Go Away.”
(4) On Tuesday AEDT, the Reserve Bank of Australia Sets its Policy Rate. A 3rd hike?
The Reserve Bank of Australia's decision on Tuesday for a potential third straight rate hike may come down to the wire, with the inflation picture and Middle East conflict no clearer than at its prior meeting.
The RBA raised its key rate 25 basis points to 4.1% in March after a 5-4 vote, the tightest margin since it started releasing breakdowns last year. Meeting minutes showed concerns about the length of the war were top of mind as rate-setters balance inflation and economic risks.
Another hike would raise the RBA's rate to a post-pandemic high and undo all of last year's rate cuts.
Governor Michele Bullock stressed the split-reflected timing rather than direction, with all board members agreeing further tightening was necessary.
Markets anticipate an 80% chance of a hike, slightly lower than before Wednesday's cooler-than-forecast core inflation numbers.
(5) Municipal elections happen in the U.K.
Thursday's municipal elections in Britain, usually a non-event for investors, could move markets in a big way, with opinion polls pointing to a heavy defeat for Prime Minister Keir Starmer's Labor Party.
Gilts have sold off this year at moments that threatened Starmer's political future.
He's struggling to justify his decision to appoint Peter Mandelson as Britain's ambassador to the United States, despite Mandelson's known ties to late U.S. sex offender Jeffrey Epstein.
A heavy defeat could spark more widespread demands for his dismissal among his own lawmakers, and stoke expectations of a successor more willing to run looser budgets. That would bring more bad news for British bonds.
The 10-year gilt is already the worst performer among G7 peers since the Iran war started on February 28th, by a wide margin.
Zacks #1 Rank (STRONG BUY) Stocks
Next are three Zacks #1 (STRONG BUY) large-cap stocks, benefiting last week, from fresh covering analyst earnings upgrades.
(1) Shell (SHEL - Free Report) : This is a $91 a share stock, with a market cap of $256.8B.
It is found in Zacks Oil & Gas Integrated - International industry. The stock holds a Zacks Value score of A, a Zacks Growth score of D, and a Zacks Momentum score of B.
F12M P/E: 9.1.
Image Source: Zacks Investment Research
Shell PLC operates as an energy and petrochemical company. It explores for and extracts crude oil, natural gas and natural gas liquids; markets and transports oil and gas; produces gas-to-liquids fuels and other products.
Shell PLC, formerly known as Royal Dutch Shell PLC, is based in The Hague, the Netherlands.
(2) Texas Instruments (TXN - Free Report) : This is a $281 a share manufacturing stock, with a market cap of $255.8B.
It is found in the Zacks Semiconductor - General industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of A.
F12M P/E: 37.
Image Source: Zacks Investment Research
Texas Instruments is an original equipment manufacturer of analog, mixed signal and digital signal processing (DSP) integrated circuits.
TI has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia and Europe.
Management's strategy has been to build assets that would be fully utilized through their lifetimes and outsource any excess demand in peak situations to outside foundries.
Analog products have been categorized into three: high performance analog, high volume analog and logic, and power management.
The Embedded Processing segment includes TI's OMAP, connectivity solutions, non-wireless DSPs and microprocessors.
The Other segment includes smaller semiconductor product lines, such as DLP products, RISC microprocessors and ASICs, calculators and other schoolroom tools, and royalties.
The company's products are sold in industrial, personal electronics, automotive, communications, enterprise and other end-markets.
(3) ABB (ABBNY - Free Report) : This is a $101 a share aluminum stock, with a market cap of $185.2B.
It is found in the Zacks Manufacturing - Electronics industry. The stock holds a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of A.
F12M P/E: 26.5.
Image Source: Zacks Investment Research
ABB is a leading technology company.
Its products and services can be used in automated manufacturing, providing digital solutions, electrification of industry and transport and enhancing productivity.
It reports business under 4 segments - Electrification, Robotics & Discrete Automation, Process Automation and Motion.
Electrification segment is responsible for the manufacture and sale of products and services, including low and medium voltage switchgear, control products, DIN rail components, wiring accessories and installation material for a plethora of applications.
Robotics & Discrete Automation: This segment includes the machine and factory automation solutions from the business of B&R and a wide-ranging robotics solutions and applications suite.
Process Automation: This provides control and plant optimization systems and automation products and solutions for optimizing the productivity of industrial processes.
Motion: The segment specializes in supplying motors, drives and generator products.
Key Global Macro
Friday’s April U.S. non-farm payroll report is the key macro data event.
On Monday, the Reserve Bank of Australia (RBA) looks set to hike its policy rate from 4.1% to 4.35%. There will be a presser.
On Tuesday, European Central Bank (ECB) President LaGarde gives a speech.
The U.S. ISM Services PMI for April comes out. The prior 54 reading should be matched, this time around.
On Wednesday, the U.S. ADP private payroll report for April comes out. 62K was the reading in the prior month.
On Thursday, the Euro Area retail sales report comes out. The prior data showed a +1.7% y/y expansion.
On Friday, U.S. nonfarm payrolls for April look to rise +73K, after a strong +178K in March. The household unemployment rate should stay quiet at 4.3%.
Conclusion
This week, Q1 earnings reports will also remain a major trader focus.
On April 30th, Zacks Research Director Sheraz Mian shared a Q1 EPS update —
The outlook for U.S. large-cap corporate earnings has received a material boost from the very strong quarterly results in the ongoing Q1 earnings season.
We should keep in mind, however, that the earnings picture was fairly strong coming into this reporting cycle already.
Zacks believes that it is — this broad-based and steadily improving earnings outlook — that is helping the market discount the drag from geopolitical headwinds.
This is a materially showing from these 288 index members relative to what we have been seeing from this group in other recent periods. The outperforming is particularly notable in terms of earnings and revenue growth and the revenue beats percentage.
The Magnificent 7 companies have been in the spotlight at present following quarterly results from four of the group's members — Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , Meta (META - Free Report) and Microsoft (MSFT - Free Report) .
All of these Tech leaders came out with strong results, but the numbers from Google's parent Alphabet are truly impressive, outshining its mega- cap Tech peers that are also its competitors in the fast-emerging AI world.
The Q1 quarterly results from these “Mag 7” members reconfirm these companies' leadership status.
This leadership reflects not only the enormous sums that these companies are deploying to build data centers and other AI infrastructure, but also their enormous earnings power.
Enjoy the trading week.
John Blank, PhD.
Zacks Chief Equity Strategist and Economist