Following a poor jobs report in the US, offshore markets ended lower in the red, providing an uncertain backdrop for the ASX at the start of the new trading week. Treasury yields will be in play after a late-week surge, as well as commodity prices, with oil recently touching US$80 per barrel and iron ore rallying into the weekend.

Economic calendar and news

Business and consumer confidence are on the local economic agenda this week, but it is the latest jobs figures from September that will steal the limelight over the coming days. 

Whereas the last employment reading was punctuated by timing issues and a lower participation rate, estimates suggest the number of job losses across September will again exceed 100,000, reflecting the full impact of lockdowns across New South Wales, Victoria and the ACT. 

While the participation rate is tipped to drop again, economists anticipate the unemployment rate will still rise to 4.8%. If more individuals return to looking for work over the coming months post-lockdown, thereby lifting the participation rate, the official unemployment rate may well continue to increase even as jobs are added back into the economy. 

From America, last week job numbers of 194,000 new hires fell well short of expectations for 500,000 jobs, prompting some concerns about the economic recovery currently unfolding. Similar to Australia result from August, the unemployment rate dropped, but this was influenced by lower participation across the workforce.

Looking ahead, job openings are on show, as are consumer inflation expectations, producer prices, retail sales from September, exports and imports, plus consumer sentiment. A number of officials will speak from the Federal Reserve, and in light of the weak job numbers, their commentary may be gauged for indications on the path of interest rates. However, the other key factor that will almost certainly be dissected is the inflation reading for September, with forecasts pointing to a reading above 5% for the year-on-year rate.

Stocks on watch

Earnings season kicks off with the major US banks set to detail their results for the third quarter, in a period where cyclical names are expected to shine as brightly as any other segment across the market. 

More broadly, across the period, supply chain issues and inflation are set to be a common theme for companies reporting results, including guidance forecasts as well. Nonetheless, reports are expected to point to significant year-on-year growth, which will be assessed in the face of lofty expectations.

Shifting attention back to the major banks, and we will have results from the likes of JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS), Wells Fargo (NYSE: WFC) and Citibank (NYSE: C). The key areas analysts will be scrutinising in these results are loan loss reserves, which were released as a strong tailwind last quarter, loan book growth, plus trading and corporate activity, a major driver of results since the pandemic. Among those that might touch on costs are reporting names in Walgreen Boots Alliance (NASDAQ: WBA) and Domino Pizza (NYSE: DPZ), which are both consumer-facing businesses highly dependent on supply chain efficiencies and prone to the effects of inflation and the like.After a shift in sentiment last week, local gold stocks will be on watch over the coming days as investors and traders look to see whether these names have found a bottom'. The precious metal ended the week steady, albeit at one stage after the market closed on Friday its sizeable gains were pared as yields surged. However, it was an appetite for gold in the midst of volatility, as well as technical trading that spurred on buying activity across names such as Northern Star Resources (ASX: NST), Perseus Mining (ASX: PRU), and St Barbara (ASX: SBM).

Local and international tech stocks will also be in focus as Treasury yields in the US continue to rise. The 10-year Treasury yield rate hit 1.6% late in the week, weighing on risk assets at various times throughout the week.

At the same time, crude oil briefly surpassed US$80 a barrel, which is the first time since 2014 that the threshold has been breached. The move comes as OPEC+ holds off from accelerating production, instead opting to gradually increase production by 400,000 barrels per day in November. It remains to be seen how much of this has been priced into energy shares over the coming trading sessions, but the likes of Occidental Petroleum (NYSE: OXY), Woodside Petroleum (ASX: WPL), Santos (ASX: STO) and Oil Search (ASX: OSH) have hit multi-month highs.Higher prices in the iron ore market could also provide a positive backdrop for local iron ore miners at the start of the week, with spot prices up more than 6% on the first day of trading following the extended holiday period associated with China Golden Week.