The monthly jobs report is the highlight in the coming week, as June winds down and markets start the second half of the year.

Economists are expecting about 700,000 jobs, better than the 559,000 in May but below the forecasts of several months ago that payroll creation would be rolling along with monthly gains of 1 million or more.

The report is a key read on the labor market, which has replaced lost jobs more slowly than expected as companies complain about worker shortages and difficulty finding help. But it is also being watched as a gauge on how sticky the current jump in inflation might be. Rising wages are one thing to watch but also worker scarcity, since that can make goods and services more expensive.

Stocks have turned in a mixed performance for the month of June so far. The S&P 500 was up 1.8% as of Friday for the month, and up 7.7% in the second quarter for a 15.5% year to date gain. The Nasdaq was 4.5% in June and up 8.5% for the quarter. The Dow meanwhile, lagged in June with a modest 0.2% decline but it is up 4.4% quarter-to-date.

The S&P has already edged slightly above 4,276 — the average year end forecast of Wall Street strategists, surveyed by CNBC.

For the most part, strategists expect the market to continue its upward trajectory into the second half, although at a slower pace. Some have also said the second half could bring a pause in the rally before the market ends the year higher.

“I think it’s been very good for the stock market that long rates have stopped going up in the first quarter and are going down, taking the pressure off,” said Jim Paulsen, chief investment strategist at Leuthold Group. “Meanwhile earnings have continued to climb unabated, and if you think about it the vast majority of stocks didn’t go anywhere in the second quarter. What we’ve got is a cheaper market than we had in March and we had one where rates are lower and we’re still getting unrestricted policy help from both monetary and fiscal authorities.”

Paulsen said he expects the S&P 500 could hit 4,500 before pulling back later in the year to finish at about 4,100.

“My attitude now is it’s a very hard tape to fight, and it takes a lot of fortitude to do so, but you’re at a point where it’s a lot cheaper to hedge than it has been,” said Steve Sosnick, chief strategist at Interactive Brokers. “It’s a lot cheaper to hedge and a more opportune time to do so. It’s always cheaper to buy an umbrella when there was no rain clouds on the horizon.”

Stocks were higher in the past week, despite the turbulence the week earlier after the June Federal Reserve meeting. The Fed laid the groundwork for its ultimate step away from easy policies, with Fed Chairman Jerome Powell saying Fed officials were considering tapering their purchases of mortgages and Treasury securities.

“There seems to be a greater complacency,” said Sosnick, noting the market reaction to the Fed’s potential unwind of easy policy was calm.

If the Fed announces it will taper its bond purchases in the next several months, it would be expected to wait several months more before it starts the process. Then it could take many more months to take the $120 billion in monthly purchases to zero. The unwind of that policy is especially important since it could be a precursor to the Fed raising interest rates.

“Underlying everything, there’s a huge faith in the Fed, that they will do the right thing, and they’ll continue to do the right thing,” Sosnick said.

Sosnick said he’s watching the bond market going into quarter end this week, after the surge in yields last quarter end. The relatively tame behavior of bond yields, which move opposite price, has been a hallmark of the last part of the second quarter.

The benchmark 10-year Treasury was yielding 1.54% Friday, up from 1.45% on the previous Friday.

Sosnick said if the 10-year yield does remains contained, that should be good for tech. “Right now, it appears there’s that kind of relationship between the 10-year and NDX. If 10-year yields are lower, people are using it as a buy signal for the Nasdaq 100. Is that fool proof? Far from it, but people are using it,” he said.

Tech stocks were up 2.3% for the week and 9.3% for the quarter so far, after being out of favor when yields were moving higher in March.

“The advice at the end of the first quarter was that rates were going to 2%. Rather than going up, rates went down and as a result growth beat value and techs beat financials,” said Paulsen. “Now everyone thinks rates are going to stay low longer. I think value, cyclicals and small caps are going to win this quarter. I think we’re going to have a correction and end the year around 4,100.”

The payroll number Friday morning is by far the biggest economic event of the week.

“We expect next week’s June employment report to show that nonfarm payrolls expanded by 800k, pushing the unemployment rate down to 5.5% from 5.8%. Strong demand and weak supply should continue to put upward pressure on wages,” wrote Bank of America economists.

According to Dow Jones, economists expect 83,000 payrolls were created in June and the unemployment rate fell to 5.7% from 5.8%.   But the market is also looking to see if the data reveals anything new about inflation and whether it could be transitory, or temporary, as the Fed has stated.

“The problem is because the markets have tended to surprise us, it’s tough to figure out what the trade is,” said Sosnick. “There’s two components of it. It is the unemployment rate, or the labor force participation, the stuff Powell is really looking for.”

Wage data could be hot with the Dow Jones estimate at a 3.7% year-over-year gain in average hourly wages, up from 1.98% in May.

“Are we approaching full employment? With non non-transitory inflationary affects?” Sosnick said. “You’re seeing companies giving signing bonuses. Those are transitory but if you have to raise wages and if wages are going to go up, that is non transitory.”

Besides the jobs data, there is ISM manufacturing data and monthly vehicle sales Thursday.

OPEC also meets on July 1, and market pros are watching to see if the OPEC and its alliance in OPEC plus will continue to add oil to the market.

Monday

9:00 a.m. New York Fed President John Williams

11:00 a.m. Philadelphia Fed President Patrick Harker

Tuesday

9:00 a.m. S&P Case/Shiller home prices

9:00 a.m. FHFA home prices

10:00 a.m. Consumer confidence

Wednesday

8:15 a.m. ADP payrolls

9:45 a.m. Chicago PMI

10:00 a.m. Pending home sales

Thursday

Monthly vehicle sales

8:30 a.m. Unemployment claims

9:45 a.m. Manufacturing PMI

10:00 a.m. ISM manufacturing

10:00 a.m. Construction spending

Friday

8:30 a.m. Employment report

8:30 a.m. International trade

10:00 a.m. Factory orders