Guardian Weekly Market Report – Issue 133

Reports of Note Due This Week

Markets will be closed on Monday for the Labour Day holiday. Investors will be keying in on employment reports coming in on Thursday and Friday along with the unemployment rate. 

• Monday, Sep 2– Markets are closed for the Labour Day holiday.
• Tuesday Sep 3 – At 9:45 A.M. we see the S&P manufacturing PMI for August. Then at 10:00 A.M. comes construction spending for July and ISM manufacturing for August.
• Wednesday Sep 4 – At 8:30 A.M. we see the release of the U.S. trade deficit for July. Then at 10:00 A.M. it is the job openings and factory orders for July. Finally, at 2:00 P.M. we have the Fed Biege Book.
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• Thursday Sep 5 – We start the day at 8:15 A.M. with the ADP private employment numbers followed with the Weekly Initial Jobless Claims at 8:30 AM. They are expected to be slightly lower at 225,000 versus last weeks 231,000. Also, out at 8:30 A.M. is U.S. productivity and costs for Q2. At 9:45 we see the S&P final U.S. services PMI followed at 10:00 A.M. with ISM services both for Aug.
• Friday Sep 6 – 8:30 A.M. sees the release of the U.S. employment report (Nonfarm Payroll) and the unemployment rate for August. Also, hourly wages.

Geopolitics

The rise of the far-right Alternative for Germany (AfD) party in East Germany has sparked concerns as it leads in recent polls for upcoming state elections in Saxony and Thuringia. The AFD, scrutinized for extremist views, capitalizes on dissatisfaction with migration policies and economic issues. This situation poses challenges for forming government coalitions in a region historically skeptical of NATO and Germany’s policies. The upcoming elections are critical, with the AFD potentially becoming the strongest party, which could influence national politics significantly.

Israeli forces carried out extensive military operations across the West Bank, potentially marking the most significant actions in the area in 20 years. This operation involved airstrikes, raids, and the sealing off of Jenin. Israeli Foreign Minister Israel Katz described the situation as akin to a “full-fledged war,” comparable to operations in the Gaza Strip. The operations resulted in at least ten deaths and numerous injuries. This escalation follows ongoing tensions and violence in the region, with Israel intensifying its military efforts against what it perceives as militant threats.

U.S. National Security Adviser Jake Sullivan, met with Chinese leader Xi Jinping and other high-ranking officials in Beijing to discuss stabilizing U.S.-China relations amid rising tensions. This meeting is part of ongoing efforts to maintain open communication and manage competition responsibly. Both nations are preparing for a possible summit between President Biden and President Xi later this year at international gatherings. Additionally, Sullivan’s visit included rare talks with a top Chinese military official to enhance communication and minimize conflict risks, addressing issues such as Taiwan and Chinese support for Russia against Ukraine.

A Chinese military aircraft entered Japan’s airspace near the Danjo Islands, prompting a severe response from Japan, including scrambling jets and lodging a diplomatic protest. Japan views this as a violation of its sovereignty and a safety threat. China claims it did not intend to breach Japanese airspace, with verification ongoing. This incident reflects heightened tensions and increased Chinese military activity in the region. Discussions on these issues are also occurring during U.S. national security adviser Jake Sullivan’s visit to Beijing.