Entreprise

This week’s highlights

Following the central bank’s two-day policy-making meeting, a few vital days are underway for investors looking forward to this week’s Federal Reserve to raise interest rates expected to come on Wednesday. .. The rate hike plan will be in the spotlight as the war in Eastern Europe depends on the global economy.

This week, the latest prints on producer prices and February retail sales are on the trader’s agenda, along with protracted earnings results from companies such as FedEx (FDX) and GameStop (GME).

Russia’s invasion of Ukraine eased concerns over a significant rise in interest rates by 50 basis points this month, but rising geopolitical tensions bring a new set of uncertainties to the U.S. economy as the Fed brings new uncertainties. Complicates the path to controlling inflation.

Investors are on March 15-16 at banks after Federal Reserve Chairman Jerome Powell has made an unusually clear statement in recent parliamentary testimony that he supports a 0.25% increase in short-term interest rates. You may be a little surprised by the outcome of the meeting. As sanctions against the turmoil in Russia and Ukraine and the consequent riot market in Moscow, it will be directed to the possibility of a change in the Federal Reserve’s outlook on hiking plans for the rest of the year.

“The bottom line is to move on, but we will be cautious as we learn more about the effects of the Ukrainian War,” Powell told the House Financial Services Commission on March 2.

Federal Reserve President Jerome Powell testifies before the US Housing and Financial Services Commission hearing on March 2, 2022 at Capitol Hill, Washington, USA.Reuters / Tom Brenner

“The Fed’s job will never be easier,” said James McCann, senior global economist at Aberdeen Standard Investments. “Russia’s invasion of Ukraine caused market turmoil and caused commodity prices to skyrocket.

Indeed, oil prices have skyrocketed by about 23% since Russia’s invasion of Ukraine. Brent crude oil prices traded at around $ 112 a barrel on Friday, hitting a high of nearly $ 139 a barrel at the beginning of the week as investors continued to consider banning the Biden administration from Russia’s energy imports. Some Wall Street strategists have warned that prices could skyrocket to $ 200 a barrel.

“Rising energy and food prices will already exacerbate the background of very unpleasant inflation,” McCann said. The FRB could delay policy tightening plans in the face of worsening outlook. It is unlikely to tell the market, “he added.

Geopolitical risks may have derailed from the Fed’s aggressive double bump this week, but pressure is on central banks to ease price levels that appear to show no signs of slowdown. The Consumer Price Index (CPI) rose 7.9 in February. It’s a percentage compared to last year, marking the fastest annual jump since 1982, surpassing the previous 7.5% in January.

“The Fed will probably raise interest rates at a few meetings and start quantitative tightening (QT) as planned, but because the effects of oil have been evaluated, a more extreme scenario (50bp, between meetings, sharp QT). ) Is not visible, “Bank of America said in a recent memo.

Rising energy prices have contributed to the latest consumer price index. Even before Russia invaded Ukraine, oil and gas prices were already under pressure from supply-demand imbalances. The energy index rose 3.5% in February, the largest monthly rise since October, rising 25.6. last year’s%. Further impact of the crisis is expected to appear in the March CPI data.

“We expected the supply chain to improve, probably starting later this year,” US Bank Chief Economist Tendai Capfize told Yahoo Finance Live.[The Russia-Ukraine conflict] It casts doubt on some of the supply chain improvements that were supposed to reduce inflation. “

Current gas prices are shown as they continue to rise on March 7, 2022 in Carlsbad, California, USA.Reuters / Mike Break

Current gas prices are shown as they continue to rise on March 7, 2022 in Carlsbad, California, USA.Reuters / Mike Break

In terms of economic data, traders will take another snapshot of US inflation this week from the Producer Price Index (PPI) scheduled for Tuesday. Economists surveyed by Bloomberg expect PPI excluding food and energy to be 8.7%. In February, it rose from 8.3%, which was already higher than last month’s forecast.

Meanwhile, Wednesday’s consensus economists expect retail sales, excluding cars, released by the US Census Bureau to increase 0.9%, compared to a 1.0% increase in January, according to Bloomberg data. However, core control sales, excluding gas, automotive, building materials and food services, are expected to decline 0.5% month-on-month.

This week, the earnings season is ending with names such as transportation giant FedEx and meme stock darling GameStop. FedEx will report adjusted revenue of $ 4.65 per share with revenue of $ 23.44 billion after the bell on Thursday. GameStop Revenue After Thursday’s closing price, revenue per share is expected to be $ 2.23 billion, or $ 0.84 per share.

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Economic calendar

  • Monday: No notable reports to be released

  • Tuesday: Empire Manufacturing, March (7.0 forecast, 3.1 month ago), PPI final demand, month-on-month, February (0.9% forecast, 1.0% month-on-month), PPI excluding food and energy, month-on-month, February (0.6% forecast) , 0.8% month-on-month), PPI excluding food, energy and trade, month-on-month, February (0.6% forecast, 0.9% month-on-month), PPI final demand, year-on-year, February (forecast 10.0%, 9.7% month-on-month), PPI excluding food and energy, year-on-year, February (estimated 8.7%, 8.3% last month), PPI excluding food, energy, trade, year-on-year, February (expected 7.3%, 6.9% last month), January net long-term TIC outflow ($ 114.5 billion last month), total net TIC outflow in January ($ 52.4 billion last month)

  • Wednesday: MBA Mortgage Applications, Week ended March 11 (8.5% in the previous week), Retail Sales Advance, Month-on-month, February (0.4% forecast, 3.8% in the previous month), Retail sales excluding automobiles, Month-on-month, 2 Month (forecast 0.9%, previous month 3.3%), retail sales excluding automobiles and gas, month-on-month, February (forecast 0.4%, previous month 3.8%), import price index, month-on-month, February (1.6% forecast, previous month) 2.0%), import price index excluding oil, month-on-month, February (0.7% forecast, 1.4% last month), import price index, year-on-year, February (11.3 forecast%, 10.8% last month), export price Index, month-on-month, February (1.4% forecast, previous month 2.9%), import price index, year-on-year, February (15.1% last month))), business inventory, January (forecast 1.1%, 2.1% month-on-month) , NAHB Housing Market Index, March (Forecast 81, February 82), FOMC Rate Determination, Lower Limit, March 16 (Expected 0.25%, 0.00% Advance), FOMC Rate Determination, Upper Limit, March 16 (0.50%) Forecast, 0.25% ahead), Reserve interest rate, March 17 (0.40% forecast, 0.15% lead)

  • Thursday: Housing starts, February (estimated 1.7 billion, January 1,638 million), building permit, February (estimated 1.85 million, January 1,899 million, downward revision to 1,895 million in January), February Housing starts (forecast 3.8%), January -4.1%), building permit, month-on-month, February (-2.4% forecast, January 0.7%, downward revision to 0.5%), Philadelphia Federal Business Outlook Index, March (15.0 forecast, 16.0 in February), first unemployed bill, week ended March 12 (forecast 220,000, 227,000 last week), renewal bill, week ended March 5 (forecast) 1.48 million, 1.494 in the previous week), industrial production, month-on-month, February (0.5% forecast, 1.5% in the previous month), capacity utilization, February (77.9% forecast, 77.6% in the previous month), manufacturing (SIC) Production, February (1.0% forecast, 0.2% of the previous month)

  • Friday: Existing home sales, February (forecast 6.1 million, previous month 6.5 million), existing home sales, month-on-month, February (forecast -6.2%, previous month 6.7%), leading index, February (forecast 0.4%, -previous month 0.3) %)

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Revenue calendar

Monday

Before opening the market: There is no noteworthy report schedule for the release

After market closure: Vail Resorts (MTN), Coupa Software (COUP)

Tuesday

Before opening the market: Volkswagen (VWAGY), Dole plc (DOLE)

After market closure: There is no noteworthy report schedule for the release

Wednesday

Before opening the market: Jabil (JBL)

After market closure: Williams Sonoma (WSM), Lenner (LEN)

Thursday

Before market opening: Warby Parker (WRBY), Dollar General (DG)

After market closure: FedEx (FDX), GameStop (GME)

Friday

No notable reports to be released

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Alexandra Semenova is a Yahoo Finance reporter. Follow her on her Twitter. @alexandraandnyc

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