Wealth Management Services

Making Sense: In Brief

The week ahead for markets and the economy

Phil: Last week, markets were focused on all things debt ceiling. Looking to the week ahead, let's focus on fundamental drivers beyond the debt ceiling.

Investors will be watching May's jobs report on Friday. There are signs of slight loosening in the labor market. Initial jobless claims have risen in recent months, and the number of job openings, while still historically high, has also declined. Consistent with a slowing jobs market, in Friday's report, the pace of job gains is expected to slow to around a 175,000 gains from 253,000 in April. The unemployment rate is also expected to tick higher to 3.5% from 3.4% in the prior release. If the job market is truly slowing, there are two sides to that story.

On one side, a loosening labor market assists the Fed and its fight against inflation. On the other side, a weaker jobs picture will eventually hurt economic growth.

The Case Shiller national home price index from March is out on Tuesday. In the most recent reading, national home prices rose just 2% year-over-year. As we discussed in detail during last week's monthly webinar, the housing market has slowed materially over the past year. But the limited supply of homes continues to provide some support.

On Thursday, the ISM Manufacturing Index is released. The index has pointed to contracting manufacturing activity since the fourth quarter of last year. That trend is likely to continue this week.

So items to watch this week. One, the employment report. Two, home prices. Three, ISM Manufacturing.

Making Sense In Brief Outro Slide

Brent Ciliano

CFA | SVP, Chief Investment Officer

Capital Management Group | First Citizens Bank

8510 Colonnade Center Drive | Raleigh, NC 27615

brent.ciliano@firstcitizens.com | 919-716-2650

Phillip Neuhart SVP, Director of Market and Economic Research

Capital Management Group | First Citizens Bank

8510 Colonnade Center Drive | Raleigh, NC 27615

phillip.neuhart@firstcitizens.com | 919-716-2403

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