Stocks finished this past week deeply in the red, as banking stocks tumbled under the weight of news of SVB collapse, pushing the broad indexes down.
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This week, we’ll receive a slew of important economic reports. It’s worth watching for the following economic news items, as all of them can prove to be major market movers. For a full listing of all upcoming economic events, check out TipRanks’ Economic Calendar.
The U.S. February CPI inflation, which will be reported on Tuesday, is expected to decline to 0.2% month-on-month and 6.2% year-on-year, versus January’s 0.5% and 6.4%, accordingly. If the numbers come down as expected, it would provide a signal that previous Fed rate hikes are bearing fruit, leaving room for a smaller hike in the next Fed’s meeting on March 21-22.
On Wednesday, we’ll get a glimpse of February’s Core Producer Prices (PPI) data, which is important as it serves as a leading indicator for the CPI, preceding consumer inflation by 1 to 3 months. The expectations are for a decrease to 5% from January’s 5.4%.
On the same day, we’ll learn whether the forecasts of a 0.1% monthly decline in February’s Retail Sales are correct. Sales surged 3% in January.
Finally, on Friday, we’ll receive a preliminary reading of the Michigan Consumer Sentiment Index for March. Economists project that the survey of personal consumer confidence in economic activity will show an increase to 67.5 from February’s 67.0.
If one of the reports comes in stronger than expected, it will add fuel to the anticipation of much higher-than-previously-thought Fed terminal rates. These jumped above 5.6% after Powell’s speech before Congress last week; with prices or consumer strength beating expectations we might well move to 6% (given that the plunge in bank stocks doesn’t translate into a financial crisis, which is currently not a feasible scenario). Higher interest rates don’t bode well for the stock markets and weigh especially on more speculative growth stocks. However, there are stocks that can buck the trend even in the most difficult markets; it’s a good idea to screen for those before making an investment decision.
