Stocks closed out a stellar first quarter last week, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all posting impressive gains. Now, all eyes are on this week’s jobs report to see if the momentum will continue.
The March jobs report, set to be released on Friday, will be a key indicator of the health of the labor market. Economists are expecting to see 216,000 nonfarm payroll jobs added to the US economy, with the unemployment rate falling to 3.8%. This follows a strong February where the US economy added 275,000 jobs.
Federal Reserve Chair Jerome Powell recently commented on the strength of the job market and the economy, stating that there is no rush to cut rates. The upcoming jobs report will provide further insight into whether this sentiment holds true.
In addition to the jobs report, updates on job openings, wage data, and activity in the services and manufacturing sectors will also be closely watched this week.
On the corporate side, Disney’s proxy battle with activist investor Nelson Peltz is coming to a head, with the results of a pivotal shareholder vote expected on Wednesday. Peltz has been pushing for a boardroom shakeup at Disney, seeking board seats for himself and former Disney CFO Jay Rasulo.
Overall, the market’s strong performance in the first quarter has investors optimistic, but some indicators suggest that a period of “digestion” may be needed to sustain the rally. The Levkovich Index, which measures investor sentiment, recently entered “euphoria,” signaling a lower probability of above-average returns in the near term.
As the week unfolds, investors will be closely monitoring economic data, corporate developments, and market sentiment to gauge the direction of the market in the second quarter.