By Danny Jasper, Senior Vice President of Capital Markets

Mortgages are worse Monday morning, but the busy economic week ahead will provide a plethora of significant market data for investors to digest.  After hearing hawkish Federal Reserve sentiment last Wednesday, market participants will once again become highly U.S. data dependent over the next six weeks leading up to the December FOMC (Federal Open Market Committee) meeting.

We started with this morning’s data on construction spending and ISM manufacturing, which both came in better than expected.  Construction spending in September rose 0.6% month-over-month (MoM), up 0.1% over the 0.5% consensus estimate, and is up 14.1% year-over-year (YoY).  During the first three quarters of 2015, construction spending totaled $786.6 billion, good for a 10.5% YoY increase from $711.8 billion.

ISM manufacturing printed at 50.1 vs. a 50.0 prediction, good for the 34th consecutive month of expansion in the manufacturing sector.  The October Markit U.S. Manufacturing PMI forecast was also released, which showed a beat from 54.0 to 54.1, so the trend in growth in the manufacturing sector appears to be improving.

All Eyes on Friday’s Non-Farm Payrolls Report

As the week progresses, the market will receive more valuable data leading up to Friday’s Non-Farm Payrolls report.  Friday’s jobs data will undoubtedly take the cake as the primary focus for investors after job growth has slowed over the last two months to the lowest amount in the last three years — an average of +139,000.

However, analysts are expecting payroll data to rebound for October, as estimates have the print at +185,000 and for the unemployment rate to drop to 5.0%.  Average hourly earnings are expected to rise +0.2% MoM and +2.3% YoY, and for the participation rate to rise after it dropped to a very weak 62.4% in September.

Leading up to Friday’s report, other highlights include data on factory orders Tuesday, ADP and composite/services PMI Wednesday and weekly jobless claims and nonfarm productivity reports on Thursday.

Equities Increased in October

October was a big month for equities, as the Dow rose almost 10% to close at 17,663.  The S&P saw slightly narrower gains, but was still up a solid 160 points on the month to close at 2,080.  The 10-year treasury yield rose from 2.03% to 2.15%.  The trend is continuing on this first trading day of November, as the Dow is up 100 points to 17,765, and the S&P is up 13 to 2,092.

Economic calendar for this week (courtesy of the FNMA trading desk):

Date/Time Event Period Survey Actual Prior Revised
11/02/2015 09:45 Markit US Manufacturing PMI Oct F 54 54.1 54
11/02/2015 10:00 Construction Spending MoM Sep 0.50% 0.6% 0.70%
11/02/2015 10:00 ISM Manufacturing Oct 50 50.1 50.2
11/02/2015 10:00 ISM Prices Paid Oct 38.8 39.0 38
11/03/2015 09:45 ISM New York Oct 46 44.5
11/03/2015 10:00 Factory Orders Sep -0.90% -1.70%
11/03/2015 10:00 Factory Orders Ex Trans Sep -0.80%
11/03/2015 10:00 IBD/TIPP Economic Optimism Nov 47.4 47.3
11/03/2015 Wards Domestic Vehicle Sales Oct 14.10m 14.36m
11/03/2015 Wards Total Vehicle Sales Oct 17.70m 18.07m
11/04/2015 07:00 MBA Mortgage Applications 30-Oct -3.50%
11/04/2015 08:15 ADP Employment Change Oct 180k 200k
11/04/2015 08:30 Trade Balance Sep -$41.00b -$48.33b
11/04/2015 09:45 Markit US Composite PMI Oct F 54.5
11/04/2015 09:45 Markit US Services PMI Oct F 54.5 54.4
11/04/2015 10:00 ISM Non-Manf. Composite Oct 56.5 56.9
11/05/2015 07:30 Challenger Job Cuts YoY Oct 93.20%
11/05/2015 08:30 Initial Jobless Claims 31-Oct 260k 260k
11/05/2015 08:30 Nonfarm Productivity 3Q P -0.30% 3.30%
11/05/2015 08:30 Continuing Claims 24-Oct 2140k 2144k
11/05/2015 08:30 Unit Labor Costs 3Q P 2.30% -1.40%
11/05/2015 09:45 Bloomberg Consumer Comfort 1-Nov 42.8
11/06/2015 08:30 Change in Nonfarm Payrolls Oct 180k 142k
11/06/2015 08:30 Two-Month Payroll Net Revision Oct
11/06/2015 08:30 Change in Private Payrolls Oct 165k 118k
11/06/2015 08:30 Change in Manufact. Payrolls Oct -5k -9k
11/06/2015 08:30 Unemployment Rate Oct 5.10% 5.10%
11/06/2015 08:30 Average Hourly Earnings MoM Oct 0.20% 0.00%
11/06/2015 08:30 Average Hourly Earnings YoY Oct 2.30% 2.20%
11/06/2015 08:30 Average Weekly Hours All Employees Oct 34.5 34.5
11/06/2015 08:30 Underemployment Rate Oct 9.90% 10.00%
11/06/2015 08:30 Change in Household Employment Oct 200 -236
11/06/2015 08:30 Labor Force Participation Rate Oct 62.40%
11/06/2015 15:00 Consumer Credit Sep $17.750b $16.018b