In the Global Week Ahead, U.S. jobs numbers dominate the agenda, as markets brace for a choppy September.

In Europe, France seeks a way through its political mess, and Germany is poised for regional polls.

African leaders are heading to Beijing.

Next are Reuters’ five world market themes, reordered for equity traders—
 

(1) Typically, Stock Market Volatility Rises in SEP and OCT.

Global stocks have bounced back to near-record highs after an early August swoon driven by a Bank of Japan interest rate hike causing a feedback loop of selling and volatility.

There could be more trouble ahead.

• Bank of America analysts say stock market volatility tends to rise in September and October
• Citi strategists reckon market expectations of future stock market swings (VIX) are too low

August's selloff was ignited as carry trades that gambled on U.S. rates staying far higher than Japan's imploded.

Unsuccessful speculators sold other assets to cover losses, helping to wipe about $1 trillion off U.S. tech stocks.

Markets have since moved to a view that Fed rate cuts will support stocks and bonds, but data surprises could disrupt currency markets and potentially cause further cross-asset shocks.
 

(2) On Friday, Sept. 6th, the AUG Nonfarm Payroll Numbers Come Out.

With the Federal Reserve on the cusp of monetary policy easing for the first time in years, attention turns to the Sept. 6th U.S. employment data for clues on how aggressively the Fed might move in coming months.

Fed Chair Jerome Powell flagged it was time to start reducing interest rates, and many in the markets expect the process to begin with a 25-basis-point cut at the Sept. 17th-18th meeting.

Further signs of the labor market weakness that helped to roil markets in late July and early August could revive recession fears and cause investors to dump riskier assets.

Expectations of heftier rate cuts have dented the U.S. dollar, which is hovering around one-year lows, in part on expectations that imminent monetary policy easing will narrow the yield advantage the U.S. has over many developed economies.
 

(3) Political Events in France and Germany Stay Central to Europe.

Summer has ended abruptly in France.

Having successfully hosted the Olympics, France needs a government, and the focus has returned to President Emmanuel Macron's political crisis.

Socialists and Greens say they will not participate in further talks with Macron, who has slammed the door on a potential leftist government.

Investors, waiting for progress, are shunning French stocks. The CAC index remains -5% below levels seen in June before Macron announced a snap election and has hardly risen this year, while German shares have rallied +12%.

Germany has problems of its own. Two east German states held elections on Sept. 1st, and that could shake up politics before 2025's federal election.

Populist parties should do well, while the economy is weak, shrinking 0.1% in Q2. The Ifo Institute president says the economy is increasingly falling into crisis.

The markets' current focus on France, could soon shift to Germany.
 

(4) Bank of Japan (BoJ) Policy Rate Hiking Hawks Remain Undaunted.

Bank of Japan officials have not shied away from further rate hikes despite the August market ructions, as BOJ chief Kazuo Ueda's sharp hawkish shift collided with U.S. recession worries, and an aggressive unwind of bets against the yen and global stocks sell-off.

Deputy Governor Ryozo Himino echoed his boss by saying monetary tightening would continue if inflation evolves as the BOJ expects and markets need to be monitored closely.

The course for consumer prices is far from clear though: Tokyo CPI, a bellwether for the nationwide figure, accelerated to 2.4% in August, above the BoJ's +2% target. The closely watched core-core measure excluding fresh food and energy came in at just +1.3%.

Retail sales figures published at the end of August fell short of estimates, while household spending has declined every month since February last year.

An update of that series is due on Sept. 6th.
 

(5) African Leaders Head to China.

African government officials, including presidents and prime ministers from countries including Kenya, Senegal and South Africa head to Beijing for the ninth edition of the Forum on China-Africa Cooperation.

The once-every-three-years meeting — the main summit of engagement between both sides — follows data that showed annual Chinese lending to the continent rose to $4.6 billion last year, the first increase since 2016.

However, the figure is far from the peak 2012-2018 levels of more than $10 billion at the height of the Belt and Road Initiative.

The decline has been caused by China's own domestic pressures and debt problems among African economies, such as Ethiopia, Kenya and Zambia.

African officials will be keen to seek commitments from Beijing on boosting financing and investments, while Ethiopia, for instance, will focus on debt restructuring talks.
 

Zacks #1 Rank (STRONG BUY) Stocks

Let’s take a look a three Zacks #1 Rank (STRONG BUY) large cap stocks (aka those above $5B), that also offer Zacks desirable long-term VGM investing scores of A or B.

(1) Assurant (AIZ Quick QuoteAIZ - Free Report) : This is a $196 a share stock found in the Finance-Insurance/Multi-line industry. The market cap is at $10.2B. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of A.

Image Source: Zacks Investment Research

Founded in 1969 and headquartered in New York, Assurant Inc. is a global provider of risk management solutions in the housing and lifestyle markets, protecting where people live and the goods they buy. The company operates in North America, Latin America, Europe and Asia Pacific. Assurant was incorporated as a Delaware corporation in 2004.

The company reports through two reportable segments: Global Lifestyle and Global Housing.

Its Global Lifestyle segment (80% of 2023 Net earned premiums) provides mobile device protection products and related services and extended service products and related services for consumer electronics and appliances (referred to as Connected Living); vehicle protection and related services (referred to as Global Automotive); and credit and other insurance products (referred to as Global Financial Services).

Global Lifestyle operates globally, with about 82% of its revenues from North America, 8% from Latin America, 5% from Europe and 5% from Asia-Pacific for the year ended Dec 31, 2022.

Global Housing (20%) provides lender-placed homeowners insurance, lender-placed manufactured housing insurance, lender-placed flood insurance; and renters insurance and related products (referred to as Multifamily Housing), as well as voluntary manufactured housing and other insurance. This segment is comprised of two key lines of business, Homeowners and Renters and Other.

On Aug 1, 2018, Assurant sold its Mortgage Solutions business, which comprised property inspection and preservation, valuation and title services and other property risk management services.

(2) Maplebear (CART Quick QuoteCART - Free Report) : This is a $36 a share stock found in the Business Services – Technology Services industry. The market cap is at $9.4B. I see a Zacks Value score of D, a Zacks Growth score of A and a Zacks Momentum score of B.

Image Source: Zacks Investment Research

Maplebear Inc. is a grocery technology company principally in North America, works with grocers and retailers to transform how people shop.

The company's Instacart Platform offers retailers a suite of enterprise-grade technology products and services to power their e-commerce experiences, fulfill orders, digitize brick-and-mortar stores, provide advertising services, and glean insights.

Maplebear Inc. is based in San Francisco, CA.

(3) Orion OYJ (ORINY Quick QuoteORINY - Free Report) : This is a $27 a share stock found in the Medical - Drugs industry. The market cap is at $7.8B. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of A.

Orion Oyj is a pharmaceutical company. It develops, manufactures and markets human and veterinary pharmaceuticals, active pharmaceutical ingredients and diagnostic tests.

The company's core therapy consists of central nervous system disorders, oncology and respiratory.

Its product pipeline includes inhaled Easyhaler(R) pulmonary drugs.

Orion Oyj is headquartered in Espoo, Finland.
 

Key Global Macro

The start of a month is always a busy one for macro indicators.

This September will be no exception.

• ISM Manufacturing PMI out Tuesday
• August U.S. nonfarm job additions data is out on Friday

Those two are likely the biggest market-moving macro prints in this short trading week.

On Monday, this is the U.S. and Canada Labor Day holiday.

The Euro Area HCOB manufacturing PMI for August comes out. A low 42.1 is the consensus. The prior is also 42.1.

On Tuesday, the Swiss Consumer Price Index (CPI) for August comes out. The consensus is for +1.2% y/y. The prior reading was +1.3% y/y.

The U.S. S&P global manufacturing PMI for August comes out. Consensus looks for 48. The prior months’ reading was also 48.

The ISM manufacturing PMI for August comes out. The consensus is for a stronger 47.8. The prior reading was 46.8.

On Wednesday, Mainland China’s Caixin services PMI for August comes out. The consensus is for 52.2. The prior reading was 52.1.

The HCOB services PMI for the Euro Area should be 53.3 in August. The prior reading was 53.3. too.

Services PMI expansion leads the way, globally.

There is a Bank of Canada (BoC) policy rate decision. They look to cut their policy rate to 4.25%, from 4.5%.

The Fed’s Beige Book on regional macro conditions comes out.

On Thursday, the U.S. ADP job additions for private payrolls should be 150K in August, up from +122K in July.

The U.S. ISM Services PMI for August should be 51.5, up from 51.4 the month prior.

On Friday, U.S. nonfarm payrolls should be up +163K in August, after printing +114k in July.

The U.S. household unemployment rate should decline to 4.2% from 4.3%.
 

Conclusion

Should you be worried about your richly priced stocks, in advance of Friday’s AUG 2024 nonfarm U.S. monthly jobs report?

Zacks Research Director Sheraz Mian’s Aug. 30th comments, on his outlook for Q3-24 S&P500 earnings, offer a worthy investing perspective—

Our takeaway from the Q2-24 earnings season has been that the overall S&P500 earnings picture was stable, with management teams generally providing a reassuring view of the economic ground reality.

Regular readers of our earnings commentary are familiar with our sanguine view on corporate profitability: the earnings picture isn’t great, but it isn’t bad either.

• Zacks expects total Q3-24 earnings for the S&P500 index to be up +3.8% from the same period last year, on +4.6% higher revenues
• This would follow +8.6% earnings growth for the index in the preceding Q2-24 period, on +3.8% higher revenues

We have been flagging, however, the emergence of question marks over the Q3 earnings outlook.

The revisions trend appears to have reversed the positive and favorable move that we had been highlighting for the preceding two to three quarters.

• Negative revision trends are particularly notable on expectations for Q3-2024
• Earnings estimates for the Q3 period are getting revised down much more than we had seen in other recent periods

Have a successful trading week!

Warm Regards,

John Blank, PhD.
Zacks Chief Equity Strategist and Economist