Apple's big handoff and a jobs report: What to watch this week

The calendar ticks over into September this week, signaling — at least in this house — the end of summer, despite what any calendar "officially" says about the equinox.

We have hardly seen any summer doldrums this go-round. Plenty of action from the White House, the AI trade, the Fed, and the bond market saw to that, as the classic summer autopilot, which some investors perhaps would have liked to see, was nowhere to be found this year.

Stocks go into the week tracking about 1% off record highs after being buoyed by Nvidia's infusion of confidence in the AI trade and an increase in oil flows through the Strait of Hormuz, now at around two-thirds of their prewar level, according to Goldman Sachs .

With earnings season mostly wrapped up, the Fed, the bond market, and some of the nonspending aspects of the AI transformation — SaaSpocalypse or lack thereof — are more top of mind.

Still, the calendar has plenty to circle: quarterly results from Palo Alto Networks ( PANW ) and Dell Technologies ( DELL ) on Tuesday; Broadcom ( AVGO ), Snowflake ( SNOW ), and Hewlett Packard Enterprise Company ( HPE ) on Wednesday; and DocuSign ( DOCU ) and Victoria's Secret ( VSXY ) on Thursday. Something for everyone.

On the economic front, Friday's jobs report leads the charge, joined by job openings data and economic activity readings on Tuesday, private payrolls data on Wednesday, and job cuts data on Thursday.

Warsh recalibrates the bond markets — and a September hike

Fed Chairman Kevin Warsh's speech may not have had "forward guidance." The chair vigorously defended the central bank's new strategy of keeping its cards closer to its vest.

But Warsh gave some much-needed clarity to markets: Though Warsh is looking at wider inflation metrics, PCE was featured prominently; Warsh agrees with other governors that inflation is too high and, most critically, that current monetary policy isn't particularly restrictive.

With those things on the table, it's no wonder that the bond market downshifted and recalibrated its outlook, now pricing in a much higher probability of a rate hike at the September meeting. On Friday afternoon, following the speech, the CME's FedWatch tool showed a 60% chance of a hike, up from just 35% the day before.

That may be more than the day before, but this is still a coin flip.

"Today's speech rightly erred on the hawkish side of the ledger," BlackRock's Rick Rieder noted. "We don't by any means think that it necessitates a rate hike in September, especially with more employment and inflation reports before that meeting."