The Week Ahead: US ISM, ADP data; Salesforce earnings

A full trading week awaits as US markets reopen after Thanksgiving. Although US government agencies are up and running again after the shutdown, economic data releases are still not on a normal schedule, so there will be no JOLTS or non-farm payrolls reports as one would expect in the first week of a new month. That matters because the US Federal Reserve, which will meet to set interest rates on Wednesday 10 December, will have to rely on alternative data points to gauge the health of the US economy. These include the upcoming purchasing managers’ index (PMI) readings from the Institute of Supply Management (ISM), offering insights into the health of the manufacturing and services sectors, and private sector employment data from payroll processing firm ADP. Meanwhile the current earnings season is winding down, but a few multi-billion dollar businesses are still to report, including cloud software company Salesforce. 

US November ISM data

Monday 1 December (manufacturing PMI)

Wednesday 3 December (services PMI)

The US manufacturing sector has been in contraction – as indicated by readings below 50 – since March. In contrast, the services sector has been in expansion territory, with readings above 50, in every month of this year but May. As far as the Fed’s upcoming interest rate decision is concerned, the prices paid and employment data for both the manufacturing and services subcomponents may offer some insights into the path of inflation and the labour market, both of which are under scrutiny from policymakers and the market.

If the data supports a rate cut, then the euro may rise as the US dollar weakens. The technical chart below suggests that EUR/USD has formed a double bottom, though further data is needed to confirm the pattern. That confirmation could come if EUR/USD rises above $1.165 in the near term. The relative strength index (RSI) is trending higher, signalling that a trend change may be underway. A breakout above the neckline of the double bottom pattern near $1.165 could send the pair back to $1.176.

EUR/USD, May 2025 - present

^{Sources: TradingView, Michael Kramer}

US November ADP jobs report

Wednesday 3 December

The US labour market is transmitting mixed signals. While the ADP data for October was better than expected, the bigger picture of the past six months is one of weakness. If the Fed cuts interest rates because the jobs market is softening, then gold could receive a boost, supported by lower interest rates and a weaker dollar.

Gold has been consolidating over the past few weeks and is now very close to breaking out and moving higher again. The RSI has begun to turn higher, suggesting that momentum may be improving. If gold breaks above $4,200 a troy ounce, it could pierce the downtrend that was established on 20 October. A move above that downtrend could see the precious metal retest the highs around $4,400.

Gold CFDs, July 2025 - present 

^{Sources: TradingView, Michael Kramer}

Salesforce Q3 earnings

Wednesday 3 December

Analysts expect Salesforce to report that fiscal third-quarter earnings increased 18.6% to $2.86 a share as revenue grew 8.8% to $10.3bn. Billings are expected to be up 11.2% at $8.5bn. Looking forward to the fourth quarter, analysts estimate earnings growth of 9.3% to $3.04 a share on revenue growth of 9.1% to $10.9bn, with billings forecast to increase 7.6% to $18.7bn. 

Options markets imply that traders expect Salesforce stock, which closed at $228 (down 31% year-to-date) on Wednesday before US markets closed for Thanksgiving, to move by an average of 7.2% in either direction after the Q3 earnings announcement. The company, a constituent of the Dow Jones, sells software that helps businesses manage customer relationships. 

Options positioning in the stock is fairly negative, while implied volatility is elevated. This means that put options may lose value once the company reports results, which could help propel the share price higher, as put premiums drop due to implied volatility decay. The technical chart shows that the $230 level has been a strong area of both support and resistance for the shares since June 2023.

If the shares rally following the results, they could face resistance at around $245. Beyond that area, the price could advance further towards $260. However, if support breaks, the shares could sink towards $195.

Salesforce share price, January 2023 - present

^{Sources: TradingView, Michael Kramer}

Market Calendar

Monday 1 December

Tuesday 2 December

Wednesday 3 December

Thursday 4 December

Friday 5 December

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