Traders on the floor of the New York Stock Exchange.

Source: NYSE

April’s job report and a flurry of earnings news make for another busy week for the markets as the calendar rolls into May.

Stocks saw solid gains in April as REITs, consumer staples and communications services outperformed the broader market by more than 7%. April ended sourly, however, and stocks sold on Friday.

“There has been a 30% rally since November,” said Jimmy Chang, chief investment officer at Rockefeller Global Family Office. He noted that November-April is historically the strongest for stocks. “There is a saying, ‘Sale in May, go away.’ It may be a little appropriate this year as we’ve done so well over the past six months. “

Report on great jobs

The April employment report is due to be released on Friday and the market is expecting a large number.

Economists say the workforce could easily reach 1 million in April after 916,000 new jobs were created in March. Estimates range from about 700,000 to a forecast of 2.1 million by Jefferies economists.

According to the Dow Jones, there is a consensus forecast of 978,000 among economists surveyed and the unemployment rate is expected to fall from 6% to 5.8%.

Federal Reserve spokesmen will also be important after Fed chairman Jerome Powell said last week that the central bank is still looking for “significant further progress” on its economic goals.

The chairman stressed that the Fed is not close to scaling back its bond-buying program, which has surprised some investors. Some professionals in the bond market had expected the Fed to begin discussing cut buying at its June meeting and reducing the monthly bond purchase of $ 120 billion by the end of the year or early next year.

“Next week is all about the number of jobs because as part of the Fed’s path to ‘significant progress’ in both of its roles, we’ll see how far along they are next Friday,” said Peter Boockvar, chief investment Officer at Bleakley Advisory Group. The Fed’s mandate is to seek full employment and a steady rate of inflation, targeting 2%.

The Fed was expecting a temporary spell of high inflation that is expected to ease over the course of the year, although Boockvar and others say inflation could be hotter than the central bank expects. The core price index for personal consumption expenditure rose 0.36% in March, with the rate rising from 1.4% in the previous year to 1.8%. It is expected to rise even further in April. Headline inflation in the consumer price index is expected to start at 3% or better when reported on May 12th.

Just days after Powell’s comments on the rejuvenation, Rob Kaplan, president of the US Federal Reserve in Dallas, said Friday the Fed should begin discussions on reducing bond purchases as imbalances in financial markets and the economy are moving faster than expected improve.

The market’s focus on the Fed’s bond program makes the job report even more important. If the central bank begins to scale back these asset purchases, it would signal that it is on track to hike rates. Most economists don’t expect the Fed to hike rates before 2023.

“If that job count is very high, people will make their assessment of when the Fed might rejuvenate,” said Michael Schumacher, director of interest rates at Wells Fargo.

Powell will be among the Fed speakers for the coming week, but he is not expected to take any new views if he attends a National Community Reinvestment Coalition conference on Monday afternoon. Kaplan speaks Tuesday and Thursday, and New York Fed President John Williams and Cleveland Fed President Loretta Mester are also among the central bank officials speaking for the week ahead.

The result increases

So far, 87% of the S&P 500 companies have beat earnings estimates, and earnings appear to be growing by more than 46%, according to Refinitiv.

Jonathan Golub, Credit Suisse’s chief strategist in the US, raised his forecast for the S&P 500 on Friday on the back of strong gains. “We are increasing our target price for 2021 S&P 500 from 4,300 to 4,600, an increase of 9.2% from current levels and 22.5% for the year,” he wrote.

The result is expected by a diverse group of companies, from General Motors to ViacomCBS. Pharma will be in the spotlight, as Covid vaccine makers Pfizer and Moderna report. Draftkings and Beyond Meat are also on the program.

A variety of travel-related companies publish results including Booking Holdings, Hilton Worldwide, Marriott Vacations, and Caesars Entertainment. Consumer brands such as Anheuser Busch Inbev and Estee Lauder report, as do insurers such as AIG, Allstate and MetLife. (A calendar with some key earnings dates is shown below.)

Chang said the market has already discounted a lot of positive news.

“Despite the really strong reports from the Bellwether companies, you are seeing some of the names wear off a bit,” said Chang. “I think it’s a sign that so much good news is being discounted. I suspect the market needs to take a breather. I think in the next few months we will likely see a sideways movement. There will likely be a pullback, which will lead to it. ” be healthy.”

The S&P 500 was up 5.2% in April, closing at 4,181 on Friday. It’s now up 11.2% for the year to date. The Dow rose 2.7% to 33,874 in April and the Nasdaq rose 5.4% in April, ending at 13,962 on Friday.

Chang said he expected some of the “boring” blue chips that didn’t compete in the rally that often do better. Some of these names can be found in the pharmaceutical industry, he said.

Next week, investors will be looking for words from Warren Buffett at Berkshire Hathaway’s annual meeting on Saturday.

Calendar for the week ahead

Monday

Monthly vehicle sales

Merits: Avis Budget, Loews, Alexion Pharmaceuticals, Rambus, Leggett and Platt, Vornado, American Water, Iamgold, Mosaik, Apollo Global Management, ZoomInfo, Estee Lauder, ON Semiconductor

9:45 am Manufacturing PMI

10:00 am ISM production

10:00 a.m. building expenses

2:00 p.m. Senior Loan Officer survey

2:10 p.m. John Williams, President of the New York Fed

2:20 p.m. Fed Chairman Jerome Powell at the National Community Reinvestment Coalition conference

Tuesday

Merits: Pfizer, CVS Health, ConocoPhillips, Martin Marietta Materials, Activision Blizzard, DuPont, KKR, T-Mobile, Akamai, Natural Resource Pioneer, Lattice Semiconductors, Denny’s, Hyatt Hotels, Host Hotels, PerkinElmer, Prudential Financial, Viavi, Caesars Entertainment, Thomson Reuters, Cummins, Vulcan Materials

8:30 a.m. international trade

10:00 a.m. factory orders

1:00 p.m. Robert Kaplan, President of the Dallas Fed

1:00 p.m. Neel Kashkari, President of the Minneapolis Fed

Wednesday

Merits: General Motors, Hilton Worldwide, Booking Holdings, Fox Corp., Uber Technologies, Etsy, PayPal, Allstate, Award, Cognizant Technology, MetLife, Marriott Vacations, CF Industries, Marathonöl, CyberArk Software, Emerson Electric, Amerisourcebergen, BorgWarner, Zynga, Tangier Factory Outlet, Twilio

8:15 am ADP employment

9:30 a.m. Charles Evans, President of the Chicago Fed

9:45 a.m. Services PMI

10:00 am ISM services

11:00 am Eric Fedgren, President of the Boston Fed

12:00 p.m. Loretta Mester, President of the Cleveland Fed

3:00 p.m. Evans at the Chicago Fed

Thursday

Merits: Regeneron, ViacomCBS, Kellogg, Moderna, Murphy Oil, Beyond Meat, Shake Shack, Square, Roku, Axon, Cushman and Wakefield, Tapestry, Neilsen, AIG, Anheuser-Busch, EOG Resources, Consolidated Edison, DropBox, Expedia, Roku , Peloton Interactive, Datadog, Cardinal Health, Ambac Financial

8:30 am Initial jobless claims

8:30 a.m. Productivity and Costs

9:00 a.m. John Williams of the New York Fed

10:00 a.m. Dallas Fed Chaplain

1:00 p.m. Loretta Mester, President of the Cleveland Fed

1:00 p.m. Raphael Bostic, Atlanta Fed President

Friday

Merits: Cigna, Siemens, Gannett, AMC Networks, Draftkings, Liberty Broadband and Elanco Animal Health

8:30 a.m. employment

10:00 a.m. wholesale

3 p.m. consumer credit