Week Ahead on Wall Street: Unexpected Strength

Estimated reading time: 5 minutes

If Not March, When?

Welp, Federal Reserve Chair Jerome Powell and a hot jobs report poured cold water on the odds of a March policy rate cut, so back to the drawing board we go. Data dependence will be the name of the game for investors trying to predict when the elusive first rate cut will finally come.

The U.S. economy has continued to be strong, proving naysayers and those worried about consumer spending wrong (for now), and there really isn’t much in the way of data this week that might derail that narrative. Revisions to CPI data due Friday are probably the only data news that could shake things up, but barring a real surprise the story shouldn’t change. If anything, since Fed officials are now out of their blackout period, and free to comment on the economy and monetary policy, they may be more focused on last week’s data. 

To recap, investors will spend much of the week digging for hints and parsing through every word Fed officials utter. And if you forgot about earnings season, that’s still going on, too. No rest for the wicked!

Economic Data and Earnings Reports

Monday

• January ISM Services PMI: This index, released by the Institute for Supply Management, tracks how purchasing managers across different services industries feel about the business environment.
• Quarterly Senior Loan Officer Opinion Survey: This is a survey of large domestic banks, as well as U.S. branches and agencies of foreign banks on bank lending practices and loan demand.
• Fedspeak: Atlanta Fed President Raphael Bostic will give welcoming remarks at an event focused on the economic returns of education and training.
• Earnings: Air Products and Chemicals (APD), Caterpillar (CAT), Estee Lauder (EL), FMC (FMC), IDEXX Laboratories (IDXX), Loews Companies (L), McDonald’s (MCD), NXP Semiconductors (NXPI), ON Semiconductor (ON), Simon Property Group (SPG), Tyson Foods (TSN), and Vertex Pharmaceuticals (VRTX).

Tuesday

• Fedspeak: Cleveland Fed President Loretta Mester will speak on the economic outlook. Minneapolis Fed President Neel Kashkari will participate in a moderated Q&A. Boston Fed President Susan Collins will give opening remarks at a Fed conference on the labor market. Philadelphia Fed President Patrick Harker will speak on the Fed’s role in the economy.
• Earnings: Assurant (AIZ), Amcor (AMCR), Ametek (AME), Amgen (AMGN), Atmos Energy (ATO), Carrier Global (CARR), Cincinnati Financial Corporation (CINF), Chipotle Mexican Grill (CMG), Cummins (CMI), Centene (CNC), Cognizant Technology Solutions (CTSH), DuPont de Nemours (DD), Enphase Energy (ENPH), Essex Property Trust (ESS), Edwards Lifesciences (EW), Ford Motor (F), Fiserv (FI), Fortinet (FTNT), GE HealthCare Technologies (GEHC), Gilead Sciences (GILD), IDEX (IEX), Gartner (IT), Jacobs Solutions (J), Jack Henry & Associates (JKHY), Linde (LIN), Eli Lilly (LLY), Omnicom Group (OMC), Prudential Financial (PRU), UDR (UDR), VF (VFC), Veralto (VLTO), Waters (WAT), Willis Towers Watson (WTW), and Xylem (XYL).

Wednesday

• December Consumer Credit: Borrowing activity gives insight into broader economic activity. It has trended lower as interest rates have risen, but is poised to turn higher.
• December Trade Balance: Trade, made up of exports and imports, is an important driver of economic activity.
• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.
• Fedspeak: Fed Governor Kugler gives her outlook for the economy and monetary policy. Boston Fed President Collins speaks about the economy. Richmond Fed President Barkin speaks on the economic outlook and the indicators the Fed uses to guide their decision making process. Fed Governor Michelle Bowman will give a speech on supporting small businesses.
• Earnings: Allstate (ALL), Bunge Global (BG), CDW (CDW), CVS Health (CVS), Dayforce (DAY), Walt Disney (DIS), Equifax (EFX), Everest Group (EG), Emerson Electric (EMR), FleetCor Technologies (FLT), Fox Corp (FOX), Globe Life (GL), Hilton Worldwide Holdings (HLT), Mid-America Apartment Communities (MAA), McKesson (MCK), Monolithic Power Systems (MPWR), News Corp (NWS), O’Reilly Automotive (ORLY), Paycom Software (PAYC), PayPal (PYPL), Steris (STE), Uber Technologies (UBER), Wynn Resorts (WYNN), and Yum! Brands (YUM).

Thursday

• December Wholesale Inventories and Sales: Wholesalers often operate as an intermediary between manufacturers and retailers, serving as a key part of the goods supply chain.
• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits applications. Jobless claims have continued to show a labor market that remains strong despite having cooled.
• Fedspeak: Richmond Fed President Tom Barkin will make an appearance on Bloomberg TV, and will speak at the Economic Club of New York.
• Earnings: Baxter International (BAX), BorgWarner (BWA), ConocoPhillips (COP), DTE Energy (DTE), Duke Energy (DUK), DexCom (DXCM), Expedia Group (EXPE), FirstEnergy (FE), Hershey (HSY), Intercontinental Exchange (ICE), Illumina (ILMN), Interpublic Group of Companies (IPG), Kellanova (K), Kimco Realty (KIM), Kenvue (KVUE), Masco (MAS), Mohawk Industries (MHK), Molina Healthcare (MOH), Motorola Solutions (MSI), Mettler-Toledo International (MTD), Healthpeak Properties (PEAK), Philip Morris (PM), Regency Centers (REG), Ralph Lauren (RL), Snap-on (SNA), S&P Global (SPGI), TransDigm Group (TDG), Tapestry (TPR), T. Rowe Price (TROW), Take-Two Interactive Software (TTWO), VeriSign (VRSN), and Zimmer Biomet Holdings (ZBH).

Friday

• 2023 Consumer Price Index Revisions: Revisions to the seasonal adjustments of the prior year’s CPI are commonly released in February. Importantly, the unadjusted data does not change during this process. 
• Earnings: Catalent (CTLT) and PepsiCo (PEP).

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