US jobs report anticipated to show steady unemployment and falling earnings growth, with geopolitical risks.

From Morningstar: 2024-07-02 06:06:00

Dan Kemp, Morningstar’s global chief research and investment officer, provides insights on key market performance and economic trends. Inflation has fallen in line with expectations, with the core PCE measure dropping from 2.8% to 2.6% over the last year. The 10-year Treasury yield rose to 4.4%, impacting bondholders.

Small-cap stocks struggle despite the Morningstar US Market index holding flat and smaller company stocks rising. The Morningstar US Small Companies index remains undervalued, highlighting the disconnect between valuation and investment timing. Earnings season approaches with high but falling expectations, as seen with Nike’s disappointing results and subsequent share drop.

Equity markets outside the US continue to lag, especially in French stocks following a snap parliamentary election announcement. Geopolitical events like elections in France and the UK pose risks for investors, with a focus on economic impacts. The US employment report on Friday is anticipated to show steady unemployment rates and falling earnings growth.

US employment report on Friday is anticipated to show steady unemployment rates and falling earnings growth. Economists expect the rate to remain at 4%, with potential volatility if outcomes differ. Geopolitical risks, including elections in France and the UK, are highlighted by Ian Bremmer at the Morningstar Investment Conference.



Read more at Morningstar: Markets Brief: US Jobs Report In View as Q3 Begins