[New York & Shanghai Market Outlook] Wall Street focuses on the Iran war and February jobs… Will China unveil a five-year economic blueprint?

U.S. strikes on Iran weigh on New York stocks

February jobs report also in focus

Attention on China’s economic blueprint to be unveiled at the Two Sessions

New York stocks this week (2–6) are expected to see heightened volatility amid U.S. strikes on Iran. The attacks have increased the likelihood of a pullback in the market.

Even as the U.S. carries out large-scale strikes on Iran, concerns over the artificial intelligence (AI) industry persist. Nvidia, regarded as the bellwether AI stock, plunged 6.65% last week alone despite posting blockbuster earnings.

Private credit jitters have also intensified, after it was confirmed that parts of the U.S. financial sector have exposure to Market Financial Solutions (MFS), a U.K. real-estate-backed lender that has gone bankrupt. As a result, shares of Goldman Sachs and Morgan Stanley—as well as major asset managers linked to private credit—fell sharply.

Against this backdrop, the February jobs report due on the 6th is seen as a major catalyst that could steer market direction. Analysts estimate the February unemployment rate at 4.3%, and expect nonfarm payrolls to increase by 60,000 from the previous month.

Christopher Waller, a Federal Reserve governor with significant market influence, said after the release of the January jobs report on the 23rd of last month that it was a "surprising upside factor," adding, "If this trend continues into February, my view on appropriate monetary policy could tilt toward holding rates steady at the upcoming meeting."

January retail sales, released on the same day as the jobs report, are also considered a key indicator, as they offer a gauge of consumer spending, which accounts for two-thirds of the U.S. economy. Consensus calls for a 0.2% month-on-month decline.

In Shanghai, the biggest event is the "Two Sessions," a collective term for the Chinese People’s Political Consultative Conference (4th), China’s top political advisory body, and the National People’s Congress (5th), which handles legislative and budget deliberations. The meetings open this week and will set China’s economic blueprint for the next five years.

Investors are also watching China’s February manufacturing and non-manufacturing purchasing managers’ index (PMI), due on the 4th. The manufacturing PMI is the most accurate barometer of China’s production momentum, while the non-manufacturing PMI helps gauge the pace of recovery in domestic demand and consumption.

New York=Park Shin-young, correspondent nyusos@hankyung.com