Looking Ahead - Wells Fargo Advisors

Looking Ahead

June 7, 2024

Stocks digest mixed jobs data

Stocks ended the week higher as overall positive labor market updates contributed to a picture of improved balance,

with a strong nonfarm payrolls print contrasting apparent slowdowns in other areas, such as manufacturing activity

and new orders. Earlier in the week, bets had increased for a September rate cut; however, after the jobs report, those

bets were pushed out further. Additional data this week highlighted continued pressure in the manufacturing sector,

with the Institute for Supply Management¡¯s (ISM¡¯s) Purchasing Managers¡¯ Index (PMI) declining for a second straight

month and moving further into contractionary territory. Meanwhile, the services PMI evidenced ongoing strength

with a print notably above consensus expectations. Looking ahead to next week, the Federal Reserve (Fed) is widely

expected to keep the federal funds rate constant on June 12. Additionally, inflation data will be in the spotlight with

updated Consumer Price Index (CPI) and Producer Price Index (PPI) inflation figures. Finally, investors will be

watching for small business optimism and consumer sentiment updates.

S&P 500 Index performance week of June 3 ¨C 7

Sources: Bloomberg, Wells Fargo Investment Institute. Data from June 3, 2024, through June 7, 2024, at 12:00 p.m. ET. Past performance is no

guarantee of future results. An index is unmanaged and not available for direct investment.

Investment and Insurance Products: ? NOT FDIC Insured ? NO Bank Guarantee ? MAY Lose Value

? 2024 Wells Fargo Investment Institute. All rights reserved.

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Looking Ahead | June 7, 2024

Week in review: June 3 ¨C 7

The highlight of the week was Friday¡¯s jobs report for May. A stronger-than-expected gain of 272K for nonfarm

payrolls suggested increased strength relative to April¡¯s downwardly revised 165K, even as a small decline in the labor

force led the unemployment rate to tick up to a 4.0% rate for the first time in two years. Meanwhile, hourly earnings

surprised to the upside with a 0.4% month-over-month (MOM) increase and a 4.1% year-over-year increase, and the

average workweek remained unchanged at 34.3 hours. Earlier in the week, the Job Openings and Labor Turnover

Survey (JOLTS) for April and the ADP Employment Report for May both provided further contrasts to the strong

nonfarm payrolls ¡ª they declined on a MOM basis and came in below consensus expectations, suggesting a gradual

slowdown in the labor market. The Fed often references balance between labor supply and demand as a key factor in

its evaluation of economic conditions, and recent data, while mixed, does seem to signal an improvement on this

front. Strong employment growth appears to be tempered by a slowdown in other areas, namely lower job openings

and quit rates as well as a gradual downward trend in the pace of earnings growth. As it pertains to Fed policy,

however, this month¡¯s strength contributed to declining market expectations for an initial rate cut in September.

Other key updates for the week pertained to the manufacturing and services sector, with both initial prints from ISM

and final prints from S&P Global. The ISM¡¯s manufacturing PMI declined into contractionary territory and fell below

consensus expectations, printing at 48.7 for May. A downturn in new orders contributed to the MOM decrease, and

prices paid saw only a marginal improvement. This was in contrast to S&P Global¡¯s manufacturing PMI, which was

revised upward to 51.3 off of a strong initial print. Meanwhile, ISM¡¯s services PMI for May increased notably to an

expansionary 53.8, well above consensus expectations and more in line with S&P Global¡¯s final print of 54.8. The

MOM increase was attributed primarily to the business activity component, a measure of current conditions.

Finally, investors had an eye on construction spending and factory orders, both for April. Construction spending

declined MOM to a 0.1% contractionary pace, the second consecutive MOM decline as elevated borrowing costs

weighed on nonresidential investment, multifamily construction, and home-improvement spending. Meanwhile,

factory orders saw 0.7% MOM growth for the second consecutive month and aligned with consensus expectations.

By Friday morning, the major averages to close higher for the week. As of 12:00 p.m. ET, the S&P 500 Index was on

track to advance 1.5%, the Nasdaq to climb 2.6%, and the Dow to rise 0.7%.

First-quarter earnings season is coming to a close, with most sectors exceeding expectations

Sources: Bloomberg, Wells Fargo Investment Institute. Chart shows actual versus projected S&P 500 Index earnings growth by sector. Actual

earnings growth as of June 7, 2024, at 8:30 a.m. ET. Bloomberg consensus estimated earnings growth as of March 29, 2024, at 8:30 a.m. ET. Past

performance is no guarantee of future results. An index is unmanaged and not available for direct investment.

Page 2 of 5

Looking Ahead | June 7, 2024

Looking ahead to next week: June 10 ¨C 14

The highlight of the week will be the Fed¡¯s June 11 ¨C 12 meeting. Investors will also eye inflation data, with the May

CPI, PPI, and Import Price Index due Tuesday, Wednesday, and Thursday, respectively. Also on tap: May¡¯s monthly

budget statement and small business optimism, along with a first look at June consumer sentiment and inflation

expectations from the University of Michigan. In the auction space, the U.S. Treasury department issues $119 billion

in 3-, 10-, and 30-year securities.

In China, the focus will be on May CPI, PPI, and money supply. The Bank of Japan will hold a policy meeting while

economic updates include the trade balance, machine tool orders, PPI, Tertiary Industry Index, bank lending, capacity

utilization, and finalized first-quarter gross domestic product (GDP). Elsewhere in the region, Australia¡¯s May labor

market data and business confidence hit the tape along with South Korea¡¯s unemployment rate.

In Europe, economic reports include the eurozone¡¯s April industrial production and trade balance in addition to

finalized CPIs from France and Germany. Releases from the U.K. include labor market data, monthly GDP, industrial

production, the trade balance, and the Index of Services. In geopolitical news, the results of European Union

parliamentary elections likely will be in focus while a G-7 leadership meeting in Italy may garner attention.

Scheduled economic releases for week of June 10, 2024

Date

Time

Country

Release

For

Consensus

Prior

Monday, 6/10

9:30 PM

Australia

NAB Business Confidence

May

NA

1.5

Tuesday, 6/11

2:00 AM

U.K.

Jobless Claims Change

May

NA

8.9k

Tuesday, 6/11

2:00 AM

U.K.

ILO Unemployment Rate 3Mths

April

4.3%

4.3%

Tuesday, 6/11

6:00 AM

U.S.

NFIB Small Business Optimism

May

89.5

89.7

Tuesday, 6/11

8:30 AM

Canada

Building Permits MoM

April

5.0%

-11.7%

Tuesday, 6/11

7:00 PM

South Korea

Unemployment rate SA

May

2.9%

2.8%

Tuesday, 6/11

7:50 PM

Japan

PPI YoY

May

2.0%

0.9%

Tuesday, 6/11

9:30 PM

China

CPI YoY

May

0.4%

0.3%

Tuesday, 6/11

9:30 PM

China

PPI YoY

May

-1.5%

-2.5%

Wednesday, 6/12

2:00 AM

U.K.

Industrial Production MoM

April

-0.1%

0.2%

Wednesday, 6/12

2:00 AM

Germany

May Final

2.4%

2.4%

Wednesday, 6/12

2:00 AM

U.K.

Manufacturing Production MoM

April

-0.2%

0.3%

Wednesday, 6/12

8:30 AM

U.S.

CPI YoY

May

3.4%

3.4%

Wednesday, 6/12

8:30 AM

U.S.

CPI Ex Food and Energy YoY

May

3.5%

3.6%

Wednesday, 6/12

2:00 PM

U.S.

FOMC Rate Decision (Upper Bound)

June 12

5.5%

5.5%

CPI YoY

Wednesday, 6/12

9:30 PM

Australia

Unemployment Rate

May

4.0%

4.1%

Thursday, 6/13

5:00 AM

Eurozone

Industrial Production SA MoM

April

0.1%

0.6%

Thursday, 6/13

8:30 AM

U.S.

Initial Jobless Claims

June 8

NA

229k

Thursday, 6/13

8:30 AM

U.S.

PPI Final Demand YoY

May

2.6%

2.2%

Thursday, 6/13

8:30 AM

U.S.

PPI Ex Food and Energy YoY

May

NA

2.4%

Thursday, 6/13

11:00 PM

Japan

BOJ Target Rate (Upper Bound)

June 14

0.1%

0.1%

Friday, 6/14

12:30 AM

Japan

Industrial Production MoM

April Final

NA

-0.1%

Friday, 6/14

8:30 AM

Canada

Manufacturing Sales MoM

April

1.29%

-2.14%

Friday, 6/14

8:30 AM

U.S.

Import Price Index MoM

May

0.1%

0.9%

Friday, 6/14

10:00 AM

U.S.

U. of Mich. Sentiment

June Prelim

72.8

69.1

Sunday, 6/16

9:30 PM

China

New Home Prices MoM

May

NA

-0.58%

Sunday, 6/16

10:00 PM

China

Industrial Production YoY

May

6.0%

6.7%

Sunday, 6/16

10:00 PM

China

Retail Sales YoY

May

3.0%

2.3%

Source: Bloomberg. Data as of June 7, 2024, as of 12:00 P.M. ET. Times shown in table are in Eastern Time. 1Q = first quarter.

Page 3 of 5

Looking Ahead | June 7, 2024

Scheduled earnings releases for week of June 10, 2024

Ticker

Company

Report date

Call time

Revenue

est.

(billions)

EPS est.

EPS year

ago

ASO

Academy Sports and Outdoors, Inc.

Tuesday, 6/11

10:00 AM

$1.38

$1.22

$1.30

ORCL

Oracle Corporation

Tuesday, 6/11

5:00 PM

$14.60

$1.65

$1.67

AVGO

Broadcom Inc.

Wednesday, 6/12

5:00 PM

$12.06

$10.85

$10.32

ADBE

Adobe Inc.

Thursday, 6/13

5:00 PM

$5.29

$4.39

$3.91

Source: FactSet. Data as of June 7, 2024, as of 8:30 A.M. ET. Times shown in table are in Eastern Time. EPS = earnings per share.

Risk Considerations

Different investments offer different levels of potential return and market risk. The level of risk associated with a particular investment or asset class generally

correlates with the level of return the investment or asset class might achieve. Stock markets, especially foreign markets, are volatile. Stock values may fluctuate in

response to general economic and market conditions, the prospects of individual companies, and industry sectors. Foreign investing has additional risks including those

associated with currency fluctuation, political and economic instability, and different accounting standards. These risks are heightened in emerging markets. Bonds are

subject to market, interest rate, price, credit/default, liquidity, inflation and other risks. Risks associated with the Technology sector include increased competition from

domestic and international companies, unexpected changes in demand, regulatory actions, technical problems with key products, and the departure of key members of

management. Technology and Internet-related stocks, especially smaller, less-seasoned companies, tend to be more volatile than the overall market. Utilities are

sensitive to changes in interest rates, and the securities within the sector can be volatile and may underperform in a slow economy. Prices tend to be inversely affected

by changes in interest rates. Real estate has special risks including the possible illiquidity of underlying properties, credit risk, interest rate fluctuations and the impact

of varied economic condition.

Sector investing can be more volatile than investments that are broadly diversified over numerous sectors of the economy and will increase a portfolio¡¯s vulnerability to

any single economic, political, or regulatory development affecting the sector. This can result in greater price volatility.

Additional information available upon request. Past performance is not a guide to future performance. The material contained herein has been prepared from sources

and data we believe to be reliable, but we make no guarantee as to its accuracy or completeness. This material is published solely for informational purposes and is not an

offer to buy or sell or a solicitation of an offer to buy or sell any security or investment product. Opinions and estimates are as of a certain date and subject to change

without notice.

Definitions

An index is unmanaged and not available for direct investment.

The S&P 500 Index is a market capitalization-weighted index composed of 500 widely held common stocks that is generally considered representative of the US stock

market.

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. It has been a widely followed

indicator of the stock market since October 1, 1928.

The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market.

The ADP employment change (private employment) report measures the number of employees on business payrolls. It is also sometimes referred to as establishment

survey employment to distinguish it from the household survey measure of employment.

Bank lending is average outstanding amounts of loans issued by banks.

The budget balance (or budget statement) is the difference between government revenues and government expenditures.

Business confidence tracks the general state of the economy as it relates to businesses. It can include broad economy-wide conditions or specific economic conditions of

a particular industry.

Capacity utilization tracks the extent to which the installed productive capacity of a country is being used in the production of goods and services.

Construction spending generally refers to the value of new construction activity on residential and nonresidential projects.

Consumer confidence (or consumer sentiment) tracks sentiment among households or consumers.

The Consumer Price Index (CPI) is a measure of prices paid by consumers for a market basket of consumer goods and services. The yearly (or monthly) growth rates

represent the inflation rate.

Factory orders track the value of new orders received during the reference period. Orders are typically based on a legal agreement between two parties in which the

producer will deliver goods or services to the purchaser at a future date.

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Looking Ahead | June 7, 2024

Gross domestic product (GDP) measures the final market value of all goods and services produced within a country. It is the most frequently used indicator of economic

activity. The GDP by industry approach (or output-based GDP) is the sum of the gross value added (output less intermediate consumption) of all industry and services

sectors of the economy (at basic prices), plus all taxes less subsidies on products. This concept is adjusted for inflation.

Average hourly earnings tracks total hourly remuneration (in cash or in kind) paid to employees in return for work done (or paid leave).

Import price indexes track changes in the prices of goods produced abroad and sold domestically (imports).

The Index of Services shows the monthly movements in the gross value added of the service industries.

Industrial production measures the output of industrial establishments in the following industries: mining and quarrying, manufacturing and public utilities (electricity,

gas and water supply). Production is based on the volume of the output.

Initial jobless claims track the number of people who have filed jobless claims for the first time during the specified period with the appropriate government labor office.

This number represents an inflow of people receiving unemployment benefits.

The international trade balance measures the difference between the movement of merchandise trade and/or services leaving a country (exports) and entering a country

(imports). This measure tracks the value of the merchandise trade balance.

The Job Openings by Industry Total Survey (JOLTS) tracks the number of specific job openings in an economy.

University of Michigan Consumer Sentiment Index is published monthly by the University of Michigan. Each month at least 500 telephone interviews are conducted

throughout the U.S. The Index of Consumer Sentiment is developed from these interviews.

Machine tool orders tracks trends in machine tool orders placed with major manufacturers.

The money supply (or money stock) measures the total amount of money in circulation in a country or group of countries in a monetary union.

The change in nonfarm payrolls measures the number of employees on business payrolls.

Purchasing Managers¡¯ Indexes (PMI) track sentiment among purchasing managers at manufacturing, construction and/or services firms. An overall sentiment index is

generally calculated from the results of queries on production, orders, inventories, employment, prices, etc.

The Producer Price Index (PPI) is a measure of the change in the price of goods as they leave their place of production (i.e. prices received by domestic producers for their

outputs either on the domestic or foreign market).

Small business optimism tracks the general state of the economy as it relates to businesses. It can include broad economy-wide conditions or specific economic

conditions of a particular industry.

The Tertiary Industry Index measures the change in the total value of services purchased by businesses.

The unemployment (or jobless) rate tracks the number of unemployed persons as a percentage of the labor force (the total number of employed plus unemployed).

These figures generally come from a household labor force survey.

Average weekly hours (or average workweek) is the average number of hours worked per week.

General Disclosures

Wells Fargo Investment Institute, Inc. (WFII) is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo &

Company.

Opinions represent WFII's opinion as of the date of this report and are for general information purposes only and are not intended to predict or guarantee the future

performance of any individual security, market sector or the markets generally. WFII does not undertake to advise you of any change in its opinions or the information

contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this

report. The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or

potential investor.

This report is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation

to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance

alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. The

material contained herein has been prepared from sources and data we believe to be reliable but we make no guarantee to its accuracy or completeness.

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered

with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors

may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or

communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered

broker-dealers and non-bank affiliates of Wells Fargo & Company.

?2024 Wells Fargo Investment Institute. All rights reserved. PM-12072025-6680221.1.1

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