The Asian markets began the week on a slow start, with everyone eying a mid-week US jobs report, which could determine when US interest rates begin to increase. The Asian markets are also getting a slow start as the end of the week becomes Easter holiday weekend, both in the United States and all over the world. The MSCI index of Asia-Pacific shares going outside of Japan was .2 percent off, while the Australian index lost .8 percent. Australia’s index fell partially because of the commodity prices that are beginning to get weaker.
On Friday, Janet Yellen, the United States Federal Reserve Chairman, emphasized once again that the United States would begin raising the interest rates. Yellen also said that these interest rates would not likely happen in June, as some experts had predicted, but instead would likely happen in the fall around September. Yellen has been talking about rising the interest rates for a couple months now, but also expressed that this would not be all at once, with only one hike likely in 2015, and stated it has to be a gradual process that plays out over the next year or possibly a little longer.
Early on Monday, the crude prices dropped a little lower to $48.33, which comes on the heels of oil prices decreasing 5 percent after Yellen’s statement on Friday. The investors are looking more at the potential Iranian nuclear deal, which would put more oil on the markets, and again likely lower the oil barrel prices. Previously, the investors and stock market was all about Yemen, with the market focusing on how the conflict in the country could alter the Middle East shipments. The Yemen situation however seems to be not as big of an issue as previously thought, since it will not be impacting the shipments of oil out of the Middle Eastern countries, at least not enough to worry about.
There is going to be a lot of economic news coming out this week, with the personal income and spending report set to hit on Monday. Most of the economists believe that this will show a slight increase in income, which will translate into a small bump in spending. On Monday, there will also be a pending home sales report coming out, in which economists believe a .4 percent increase will shrug off doubts about a lagging home buying market. The nasty weather that gripped a large part of the United States halted most of the home sales in February, but economists expect March will have better numbers to show people are still heading out to look for a new home.
On Tuesday, the S&P Case-Shiller Home Prices report will come out, which has experts hoping for a .7 percent increase for the month-over-month in February. The number is also expected to reach 4.6 percent year-over-year, which would show that there is a bigger reward than risk when it comes to purchasing a home. There will also be a Chicago Purchasing Managers Index coming out as well, which is expected to climb to near 52 percent after only being at 45 percent the month before. This would indicate there is a slow and steady economic boost going on in this very important part of the country. The Consumer Confidence report is scheduled to come out as well, but most people are not predicting a change in the 96.4 percent number. The number likely will not go down or up due to the weather that hindered consumers in the month beforehand, but economists are not worried about an unchanged confidence level.
On Wednesday, the Auto Sales report will come out, which is expected to show that 16.9 million cars were purchased in March. It is believed that the bad weather in February halted a lot of consumers when it came to going out to the car lots and getting a new car. So it looks like consumers waited for the better weather to get out there and car shop, which for the economists, better late than never. This might also show that demand in February declined for some models, but increased during the month of March. The ADP Employment Change will also be coming out, which is expected to show an increase of 225,000 when it comes to private payrolls in the United States. The Construction Spending report coming out on Wednesday should show a small drop of .1 percent, due to the horrible weather in February hindering a lot of new developments. Nonresidential construction spending is also expected to go down as well, although hopefully less than the 1.6 percent that was seen in January. The ISM Manufacturing report is expected to show a decline of .4 percent for the month of March. Which means it will slip to 52.5 for March, when it was at 52.9 in February. Just six months ago, the index was at 58.1, so there is an indication that the manufacturing market has seen a little bit of a slowdown, which may partially be due to a fairly horrible winter. Experts predict the number will slowly go up during the spring months, although the number for March is a bit concerning.
Thursday is the day when the Initial Jobless Claims report will be coming out, which is expected to rise to 285,000. The number was 282,000 just one week ago, however the labor market is struggling to get out of the bad winter weather spin as retail stores begin looking toward spring and summer hiring fairs. Although several other reports are also due out Thursday, this is the main report that both the United States and other countries such as Asia and Japan will be looking at, when it comes to determining the future of the United States, and the key interest rate hikes Yellen keeps talking about.
On Friday April 3, the United States Labor Department will be releasing the March jobs report, which is expected to already confirm what many investors already know. Most investors and experts believe it will show a small decline in the unemployment numbers, while also showing a stable and healthy economy that is adding jobs throughout most sectors. The economists have predicted that 248,000 nonfarm payroll jobs will be added in March, which in part is due to the 240,000 private payroll increase. The prediction is that unemployment rates will stay at 5.5 percent, with average hourly earnings expected to go up .2 percent in a month-over-month index. Between this report and the jobless claims, it looks like the economy might be holding fairly steady, but the increases are not as quick as many economists would like. What makes it even a little worse is that the number of jobs added is not enough to change the unemployment number, since the jobless claims rose slightly for March.