NEW YORK (CNN/Money) -
Elephants on parade, bulls on the beach, bears on the bench. It's going to be quite a week on Wall Street.
Although how many Wall Streeters will be around is up in the air. Next week brings the Republican National Convention to New York, and a full slate of economic numbers, capped by Friday's August jobs report.
The employment report is key: It will either remedy or revive worries about an economic slowdown, not to mention offering a taste of what the Federal Reserve might do about interest rates at its September meeting. All of which is major for stock prices.
"Friday is the key report for the markets this month, in terms of setting us up for what direction the market will take after Labor Day," said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
Then there's the Republican National Convention, which kicks off Monday in New York and runs through Thursday, when President Bush is expected to accept his party's nomination. It, too, will be closely watched by Wall Streeters.
Mendelsohn said that if the four-day Republican convention passes without terrorist incident, and if Friday's job report is strong, that could propel stocks higher after Labor Day, when many investors return from vacation.
"But if the payrolls number is bad, it could go the other way," he added.
Convention kicks off
Trading is not expected to be interrupted by the Republican convention, the New York Stock Exchange says, and trading is not expected to deviate from the norm.
But worries about security and crowds will cause some New York-based Wall Street professionals to skip town for at least some of the convention, analysts say.
"I've heard that numerous trading desks, out of concerns about terrorism and congestion, are staffing their disaster recovery sites with half their personnel," said Tom Schrader, managing director of U.S. equity trading at Legg Mason. "A number of money managers are going to be working from home."
Volume is typically sluggish in late summer anyway, with many investors are on vacation. But even lighter than usual volume could make trading choppy, and prone to bigger swings than is normal.
Last week, light volume -- and falling oil prices -- were good for stock prices, which rose as crude oil fell for five of the last six sessions since peaking at $49.40 a week ago.
But oil at $43 a barrel is no great comfort for most investors, and energy prices are likely to remain a concern.
Also holding stocks back: mixed economic data, suggesting the economy may be slow to rev up out of its second-quarter slowdown.
Next week, numbers of manufacturing and services will provide new clues to the economy's strength, but the payrolls report will be the key. After a burst of strength early in the year, payrolls have disappointed for two months in a row.
The jobs report and the convention will be the keys for Wall Street.
"I think if the convention is perceived as successful, and you see the expected bounce in the polls for Bush (versus Democratic nominee, Sen. John Kerry), that might reassure investors and prove a short-term positive for stocks," said Ben Halliburton, chief investment officer at Tradition Capital Management.
He said he was referring to Kerry's vow to scale back some of Bush's tax cuts, which would upset many on Wall Street. Additionally, some investors say they believe Republicans are "better" for Wall Street, due to traditionally more big business-friendly policies.
Key events in the week ahead
- Monday morning, the Commerce Department will report on personal income and spending for July. Economists, on average, expect income rose 0.5 percent, compared with 0.2 percent in June, according to Briefing.com. Spending is expected to rise 0.7 percent, after falling 0.7 percent in June.
- The GOP convention will begin Monday evening in New York and end Thursday night with President Bush's nomination acceptance speech.
- Tuesday morning, the Conference Board, a private research firm, will release its closely watched gauge of consumer confidence for August. Economists expect the index to dip to 103 from 106.1 in July.
- Also on Tuesday, NAPM-Chicago will release its index of August business activity in the Chicago region. Economists expect the index to fall to 60 from 64.7 in July.
- Wednesday morning brings the Institute for Supply Management's gauge of national manufacturing activity in August. Economists expect the index to dip to 59.9 from 62 in July.
- Thursday morning, the Labor Department will report on new jobless claims for the week ended Aug. 28. Claims rose to 343,000 in the week ending Aug. 21.
- In a separate report, the department will publish its revised estimate of productivity growth in the second quarter. Economists expect productivity grew at a revised 2.8 percent rate, versus an initial reading of 2.9 percent.
- Friday morning brings the August report on unemployment and nonfarm payrolls. Economists expect payrolls grew by 150,000 jobs, compared with 32,000 in July. The jobless rate, generated by a separate survey, is expected to hold steady at 5.5 percent.
- Later Friday morning, the ISM releases its gauge of service-sector activity in August. That index is expected to dip to 62 from 64.8 in July.
-- Senior Writer Mark Gongloff contributed to this story.