06:13 AM EDT, 09/03/2024 (MT Newswires) -- US equity investors will focus on nonfarm payrolls during this holiday-shortened week, as they expect the data will keep the Federal Reserve on path to begin easing policy in September, the worst month for stocks typically.

* Having slowed sharply in July to 114,000 in part due to the impact of Hurricane Beryl on data collection, Daiwa America forecasts a "slight pickup" in nonfarm payrolls in August by around 170,000, according to a note Monday. The average increase in H1 was 218,000. This data could leave the unemployment rate unchanged at 4.3%, the joint-highest since October 2021, "although the risks are skewed to a slight decline from July."

* Growth in average hourly earnings in the nonfarm data due Friday could remain close to the average of the past years of about 0.3% month-over-month, the Daiwa note said. The job openings -- JOLTS -- for July will be published Wednesday, another critical metric to assess the labor market health when rate cuts are on the horizon.

* The manufacturing ISM release due Tuesday will likely signal ongoing modest contraction in August -- 21st month out of 22 -- as tight financial conditions, elevated borrowing costs, and subdued demand continue to weigh, the Daiwa note said. The ISM services due Thursday probably moved sideways at 51.4, supporting the view the US economy continues to grow in Q3 at a relatively solid pace, it added.

* As for September, it has the worst historical monthly performance record of any month since 1926 as it averages a 1.2% decline and is up only 44% of the time, according to a note from S&P Dow Jones Indices.

* As of Friday, Q2 earnings for the S&P 500 were up 6.6% from a year ago, with sales 0.3% shy of a record. The estimates for Q3 and Q4 mostly held their levels, and with record earnings predicted, the 2024 earnings could jump more than 11%, the S&P note added.