Markets closed lower on Friday, clocking in a second straight week of declines following seven weeks of gains. Stocks were pushed down during the week by higher-than-expected readings on consumer and producer prices, reflecting still sticky inflation pressures and dampening expectations for a June rate cut. Friday also marked this year’s first “triple witching” event, which occurs when index futures, index options, and stock options all expire on the same day. This tends to lead to a jump in market volatility.
This week, investors will focus on the Federal Reserve Board’s meeting on March 19-20 and the subsequent policy statement and interest rate projections report. While there is no expectation that the central bank will change its interest rates at the meeting, market participants await clues on the timing of the rate cuts projected for later this year.
The latest CPI and PPI reports reflected stubborn inflationary pressures, with prices running higher than expected. Investors will closely watch whether the latest data has affected the Fed’s stance, while also bracing for the Core PCE report, scheduled to be released on March 29. The main concern is that the Fed’s preferred inflation measure will confirm the trend of a mild re-acceleration seen in the CPI and PPI reports. Meanwhile, several additional economic data points can sway the Fed’s policy stance.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional upcoming economic events, check out the TipRanks Economic Calendar.
» February’s Building Permits and Housing Starts – Tuesday, 03/19 – These reports provide valuable insights into the health of the housing market, as well as the economy overall since housing demand correlates with economic growth and consumer sentiment. Both reports are leading indicators, used by economists and analysts, among other data, to measure current demand and to estimate near-term trends in real estate and related industries.
» March’s S&P Global Manufacturing PMI (preliminary reading) – Thursday, 03/21 – The Manufacturing PMI captures business conditions in the manufacturing sector, which contributes a significant portion of total GDP. The manufacturing PMI is considered an important indicator of business conditions and the overall economic climate in the U.S.
» March’s S&P Global Services PMI (preliminary reading) – Friday, 03/22 – The Services PMI captures business conditions in the services sector; it is a crucial indicator since the services sector is responsible for over 70% of total U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
