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But the US jobs report, which hits at 8:30 a.m. AND, could embolden those who want to stay bullish through the end of the year. Economists polled by Reuters expect the economy to have added 158,000 jobs last month. That's a little less than the July figure, but still positive.
My CNN Business colleague Anneken Tappe in New York points out that the number is also above the 140,000 three-month average.
"Nell Richardson, investment strategist at Edward Jones," said Anneken, "has been a steady contributor to the strength of the economy's strength.
Looking good: A readout of private sector employment on Thursday also looked healthy, while the Institute for Supply Management's non-manufacturing index for August rose.
But problems in the manufacturing sector, which contracted for the first time in three years in August, could still rear their head. New jobs in manufacturing are expected to drop to 8,000 in August – half of what they were in July.
On the radar, from Anneken: "Investors will also focus on growing growth numbers, looking for any signs of a rebound in inflation, one of the key metrics in the Federal Reserve looks at monetary policy."
About 91% of investors now expect a 25 basis point rate cut, according to CME Group's FedWatch tool. But the likelihood of no action at all is ticking slightly higher.
A German recession could be 'all but confirmed'
Fresh economic data released Friday did nothing to improve the picture. Industrial production fell 0.6% in July compared with the previous month. It's down 4.2% versus the same month a year earlier. One of the biggest issues, according to Carsten Brzeski, ING's chief economist in Germany, is the lack of demand.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, pointed to the data that "Germany's recession is all but confirmed." That's in part because of sales were also "dreadful," he said.
"The August and September numbers could still spring upside surprises, but we do not have high hopes," Vistesen wrote in a research note.
Brzeski agrees. "Shrinking order books, high inventories and continuing external uncertainty," he said.
US banks are in a position of strength
It is fair to say that they are not only interested in the future, but that they are always interested in their lending margins.
But it is worth remembering that the banks will enter the next phase of monetary policy with plenty of muscle. Fresh data from the Federal Deposit Insurance Corporation shows that the banks insured by the agency brought in $ 62.6 billion in profit in the three months ended June. That's up 4.1% from the same period in 2018.
It's a slower pace of growth than the banks recorded throughout 2018, when the tax cuts and a humming economy feels higher and higher profits. That could hit stocks. The KBW Nasdaq Bank Index of major lenders is down slightly so far this year.
But even if the Fed cuts the rates, the biggest US players should be able to keep spending on areas like digital transformation. Their European competitors? Perhaps not so much.
Up next
The August US jobs report at 8:30 am ET is the day's big event.
Also today:
- Federal Reserve Chairman Jerome Powell speaks at 12:30 pm ET in Zurich. His remarks will be livestreamed.
Coming next week: The European Central Bank makes its move, and Britain's Parliament weighs a snap election.
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