The US labor market is finally showing signs of cracking, but next week’s inflation data will be key to deciding whether the Federal Reserve will end its rate-raising regime. Last week saw reports showing falling job openings, higher-than-expected jobless claims and layoffs outside of the tech sector. Friday’s jobs report could surprise with a rebound, but many economists expect the labor market to continue to weaken in the coming months. Fed officials have pointed to a tightening labor market as an area of concern for inflation, using it as evidence it hasn’t tightened interest rates enough. But after the region’s banking crisis in March, traders have begun to tone down expectations of Fed rate hikes this year. Data on consumer and producer prices next week could reinforce the possibility of a Fed pause, even as central banks like Cleveland Fed President Loretta Mester still call for higher rate hikes. “I know the Fed said it wanted to [keep hiking]. Of course, Friday’s jobs data will be important, but I think what’s more important is the CPI and PPI we have next week,” said Randy Frederick, managing director of trading and trading. derivatives at Charles Schwab said. the first week of April, with the Nasdaq Composite falling for three straight days as investors turned to defensive sectors. However, if next week’s inflation data shows prices are also cooling, it could be a relief for investors, said Phillip Toews of Toews Asset Management. “Those are two reasons why there’s so much money at risk and more than $5 trillion in money markets and Treasuries is likely to emerge,” Toews said. think we might have just seen that,” he added.Earnings coming Next week will also feature the first major reports of first-quarter earnings season, with Delta Air Lines, JPMorgan Chase and a few to name. After months of strategists and investors complaining that earnings estimates are too high, they’ve started to fall — but there’s still a chance. %/year, the largest decline since Q3 2020 and a significant drop from the -1%/year growth announced in Q4 2022. However, if analysts’ predictions come true Indeed, this quarter will represent the lowest level of earnings growth for the S&P 500,” Goldman Sachs’ Lily Calcagnini and David Kostin said in a note to clients Thursday. As it nears, the stock market is likely to have an active year, but more quarterly reports such as Simply Good Foods could offer a different scenario. estimates for the quarter ended Feb. 25, but they left their full-year revenue forecast unchanged and warned that gross margins are under pressure. Shares fell more than 4% that day. In other words, future earnings forecasts may still be too optimistic. “In a sense, it’s encouraging to see that the estimates are more realistic than the upcoming economic slowdown, but when you look at the 2024 estimates, they call for 12% growth. Likely to That number has to go down as well,” said Angelo Kourkafas. , investment strategist at Edward Jones. Calendar Monday: Earnings: Tilray Brands 10:00 a.m. ET – Wholesale Inventory Tuesday: Earnings: Albertsons, CarMax 6:00 a.m. ET – NFIB Small Business Index Wednesday: 8:30 a.m. ET – Consumer Price Index 2:00 p.m. ET – FOMC Thursday: Earnings: Progressive, Fastenal, Delta Air Lines, Infosys Ltd. 8:30 a.m. ET – Jobless Claims 8:30 a.m. ET – Producer Price Index Friday: Earnings: UnitedHealth, JPMorgan Chase, Wells Fargo, BlackRock, Citigroup, PNC Finance 8:30 a.m. ET – Indices import and export prices 8:30 a.m. ET – Retail Sales 9:15 a.m. ET – Industrial Production 10:00 a.m. ET – University of Michigan Consumer Sentiment 4:15 p.m. ET – H.8 Data of the Fed on the assets and liabilities of U.S. commercial banks