The Q3 2023 earnings season is drawing to an end, with most market-moving reports having already been published. Thus, investors’ attention this week will be mostly drawn to the economic reports scheduled to be released in the next few days.
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This week will be relatively heavy on economic data releases, with many important reports coming out. Given the takeout from Jerome Powell’s latest speech, watching the incoming economic reports is as important as ever.
The Federal Reserve’s Chair said that policymakers are still not confident that interest rates are “sufficiently restrictive” to bring inflation down to under 2% annual rate. Powell added, “If it becomes appropriate to tighten policy further, we will not hesitate to do so.”
The head of the U.S. central bank sent a clear message to the markets, who prematurely celebrated the end of the hiking cycle last week, after a batch of weak economic data seemed to confirm the Fed’s win over inflation. In his IMF remarks, Powell rebutted expectations of a more dovish Fed stance, basically confirming his multiple previous statements about rate decisions being data-dependent.
Here are four economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» October’s CPI and CPI ex. Food and Energy (Core CPI) – Tuesday, 11/14 – These reports measure changes in the retail prices of goods and services in corresponding data subsets. The CPI report is one of the two key inflation measures (the second one is the Personal Consumption Expenditures or PCE). Policymakers, businesses, and consumers closely watch the CPI report, as it reflects the price trends in the economy, shapes consumer spending and business outlooks, and directly affects the Federal Reserve’s policy rate decisions.
» October’s Producer Price Index (PPI) – Wednesday, 11/15 – This report, released by the Bureau of Labor statistics, reflects input prices for producers and manufacturers. Since PPI measures the costs of producing consumer goods, which directly affects retail pricing, PPI is seen as a good pre-indicator of inflationary pressures, i.e., a leading indicator for the next month’s CPI. Thus, the PPI serves the policymakers in shaping their overall inflation outlook.
» October’s Retail Sales – Wednesday, 11/15 – This report, released by the U.S. Census Bureau, provides information on how much money consumers are spending on various durable and non-durable goods. Since the report tracks the amount of spending in an economy, it helps to gauge the economy’s health and consumer spending habits, as well as the level of the buyside inflation pressures.
» October’s Industrial Production – Thursday, 11/16 – This report, released by the Federal Reserve, shows the volume of production of U.S. industries like manufacturing, mining, and utilities. Although industrial production accounts for a smaller portion of the economic activity than services, its sensitivity to consumer demand and interest rates makes it a leading indicator of GDP growth and economic performance.
