Wall Street's Week Ahead: US October Jobs Report, ECB Interest Rate Decision

Economists and market-watchers will be busy sorting through a steady stream of key corporate earnings announcements and government reports next week, in what could be a volatile few days in the markets.

Most of the focus will be on the U.S. nonfarm payrolls report for October. Due out on Friday, the report is expected to show an expansion of 235,000 jobs in October, a 13,000 decline from September, according to analysts polled by Thomson Reuters. Private payrolls are expected to rise 222,000, compared with 236,000 in the previous month. Economists expect the unemployment rate to remain unchanged at 5.9 percent, average hourly earnings to increase 0.2 percent, and hours worked to hold steady at 34.6.

An unexpected uptick in the jobs numbers, however, could fuel expectations of an interest rate hike from the Federal Reserve, following Thursday’s stronger-than-anticipated U.S. gross domestic product figures for the third quarter. Economists are keeping a close eye on interest rates, which are currently at historic lows. The Federal Open Market Committee announced Wednesday that it was keeping short-term rates near zero. Policymakers expect the Fed to raise rates by the middle of 2015 if the U.S. economy continues to show improvement.

“While the fundamentals of the economy continue to improve, the uncertainties about the direction of interest rates sooner rather than later are now on investors watch,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

Global manufacturing data will kick off the week on Monday, with the Markit Purchasing Managers Index, an indicator of the economic health of the manufacturing sector, due out for the U.S., China and the Eurozone. Recent weak manufacturing data out of the U.S., coupled with a weaker-than-expected third-quarter GDP report out of China has caused some concern about whether the global economy is beginning to slow. In a preliminary reading, the U.S. manufacturing sector slowed in October to its lowest rate of growth since July, financial data firm Markit said. A reading above 50 signals expansion in economic activity.

Central banks are also scheduled to meet in Europe and the United Kingdom to discuss whether to step up monetary easing in the regions. The Bank of England and the European Central Bank will both release interest rate decisions on Thursday. The ECB previously cuts rates to record lows in September in order to fight the threat of deflation in the Eurozone, but the central bank’s Governing Council voted to leave its benchmark interest rate unchanged during its October meeting. Following Friday’s data that revealed inflation edging up in the Eurozone in October to 0.4 percent, economists believe the region’s monetary policy will remain unchanged since inflation is still below the ECB's target of just under 2 percent.

So far this earnings season, 75.5 percent of S&P 500 companies have beat analyst expectations, according to Reuters data. That compares to 67 percent in the same period last year. Ahead on next week's earnings calendar, American International Group Inc., along with Walt Disney Co., Herbalife Ltd., and Motorola Solutions Inc. are scheduled to post their latest quarterly results.

Here's the latest economic calendar for the week of Nov. 3 All listed times are EST.

Monday, Nov. 3

9:45 a.m. -- U.S. Oct. Markit manufacturing PMI

10 a.m. -- U.S. Sept. construction spending

10 a.m. -- U.S. Oct. ISM manufacturing PMI

TBD -- U.S. Oct. motor vehicle sales

Non-U.S.:

China -- Oct. HSBC manufacturing PMI; Oct. non-manufacturing PMI

Eurozone -- Oct. manufacturing PMI

Earnings:

American International Group Inc.; Sprint Corporation; Herbalife Ltd.

Tuesday, Nov. 4