Stock markets rose again last week, supported by mostly positive earnings reports and economic data reflecting continued disinflation along with enduring economic robustness. The advance estimate for the fourth quarter’s economic growth significantly exceeded estimates, while the Federal Reserve’s preferred inflation measure, Core PCE, slowed more than was anticipated.
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This week, investors will focus on another batch of crucial economic reports, specifically those concerning the labor market, as well as on the Federal Reserve’s meeting, which is expected to provide some clues on the timetable of the prospective interest-rate cuts. Although inflation has been continuously trending downwards, the economy’s strength in the face of the high-interest rates underscores the lack of urgency to ease monetary policy. Besides, policymakers prefer to make sure that easier financial conditions, resulting from the stock market rally, do not rekindle inflation in the months ahead.
Here are three economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» January’s ISM Manufacturing PMI – Thursday, 02/01 – This report, released by the Institute for Supply Management, shows business conditions in the U.S. manufacturing sector. It is a significant indicator of the overall economic conditions. PMIs are considered one of the most reliable leading indicators for assessing the state of the U.S. economy, helping analysts and economists anticipate changing economic trends.
» January’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations – Friday, 02/02 – These reports, published by the University of Michigan, portray the results of a monthly survey of consumer confidence levels and consumer views of long-term inflation in the United States. The level of confidence affects consumer spending, which contributes about 70% of the U.S. GDP. The inflation expectations index is one component that goes into the Fed’s calculations of the Index of Inflation Expectations.
» January’s Nonfarm Payrolls and Unemployment Rate – Friday, 02/02 – The Nonfarm Payrolls and Unemployment reports, released by the U.S. Bureau of Labor Statistics, present the number of new jobs created during the previous month, along with the percentage of people that were actively seeking employment in the previous month. These reports are considered two of the more important economic indicators, as policymakers follow the shift in the number of positions since it is strongly associated with the health of the economy as a whole. One of the mandates of the Federal Reserve is full employment, and it takes labor market changes into account when determining its policy decisions.
