The economic calendar is packed to the brim in the coming week, but the inflation data will be the most important for investors.
The January Consumer Price Index (CPI) from the Bureau of Labor Statistics, due for release on Tuesday, will be heavily scrutinized, particularly after Federal Reserve Chairman Jerome Powell acknowledged the presence of “disinflation.” in the US economy.
Economists expect headline CPI to rise 0.5% month-on-month in January, a notable jump from figures seen in recent months. The new seasonal adjustments released by the BLS on Friday also changed December’s initial reading from a 0.1% monthly drop in headline inflation to a 0.1% rise in the final month of the year.
While the monthly CPI figure likely rose in January, the headline annual figure is forecast to ease to 6.2% from 6.5% the previous month, consensus estimates compiled by Bloomberg show.
Core CPI, which removes volatile food and energy components from the report and is closely watched by the Federal Reserve, is forecast to show a 0.4% rise over the month, in line with the upwardly revised rise in CPI. 0.4% in December.
On a year-over-year basis, economists expect the core CPI to rise 5.5% over the year, a modest decline from December’s 5.7% year-over-year.
Policymakers monitor “core” inflation more closely due to its nuanced eye on key inputs like housing, while the headline CPI figure has moved largely along with volatile energy prices this year.
For Chairman Powell, haven inflation, a “stickier” component of the CPI that has remained stubbornly high, is a key component in assessing the way forward for interest rates. In an informal interview last week in Washington, DC, Powell said he expects housing inflation to drop by midyear.
“There was an expectation that [inflation] it will disappear quickly and painlessly; I don’t think that’s guaranteed to be the base case,” Powell said last Monday at the Economic Club of DC. “It will take some time.”
The Producer Price Index (PPI) will give Wall Street another idea of how fast prices are rising with a look at inflation at the wholesale level on Thursday. Meanwhile, the government’s retail sales report to be released on Wednesday is expected to show continued strength in consumer spending.
Over the prior month, the PPI likely rose 0.4%, a jump from the 0.5% drop reported in December. Economists expect an annual reading of 5.4%, down from 6.2% in December.
Retail sales are expected to have rebounded in January, rising 1.9% from the previous month, after a 1.1% drop in December.
US stocks ended their worst week of the year on Friday after a strong start to 2023. The S&P 500 closed down 1.1% for the week, the Dow Jones Industrial 0.2% and the Nasdaq Composite 2.4%.
“Given the strong rally to start the year, the market was due for a cool-down period, and we got it this week,” analysts at Bespoke Investment Group said in a note.
Stock markets have rallied sharply since December on bets that the Federal Reserve could pause rate hikes sooner than expected after a steady downturn in recent rate hikes, but policymakers and strategists have continued stating that enthusiasm around a pivot is premature.
“Actually, I’m a little bit confused about what happened in the market,” Threadneedle Ventures founder Ann Berry told Yahoo Finance Live on Friday. “Powell was very clear that rates are going to go up because inflation hasn’t gotten to the point where it needs to.”
“We have our doubts about whether the economy is truly accelerating, but we hope that next week’s incoming retail sales data will keep the question alive,” Michael Gapen and his team at Bank of America said in a note to clients. last week.
On the earnings side, investors are nearing the final leg of the reporting season. About 69% of companies in the S&P 500 Index reported results through Friday, and only 69% of that share reported earnings per share above estimates, below the five-year average of 77%, according to FactSet data. .
In the coming week, investors will get results from headliners like Airbnb (ABNB), Coca-Cola (KO), DraftKings (DKNG), Paramount Global (PARA) and Deere (DE).
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Economic Calendar
Monday: There are no notable reports scheduled for publication.
Tuesday: NFIB Small Business OptimismJanuary (91.0 expected, 89.9 during the previous month); Consumer’s price indexmonth-on-month, January (0.5% expected, -0.1% over prior month); CPI excluding food and energymonth-over-month January (0.4% expected, 0.3% in prior month); Consumer’s price indexyear-over-year, January (6.2% expected, 6.5% over prior month); CPI excluding food and energyyear-over-year January (5.5% expected, 5.7% in prior month); Average real earnings per houryear-over-year, January (-1.7% over the prior month, revised to -1.5%); Actual Average Weekly Earningsyear-over-year, January (-3.1% over the prior month, revised to -2.6%)
Wednesday: MBA Mortgage Applicationsweek ending February 10 (7.4% over the prior week); empire makingFebruary (-20 expected, -32.9 over the prior month); Retail Sales Advancemonth-on-month, January (1.1% expected, -1.1% over prior month); Retail Sales Excluding Autosmonth-on-month, January (0.8% expected, -1.1% over prior month); Industrial productionmonth-over-month, January (0.5% expected, -0.7% over prior month); usabilityJanuary (79.1% expected, 78.8% over the previous month); Manufacturing Production (SIC)January (0.6% expected, -1.3% over the previous month); commercial inventories; December (0.3% expected, 0.4% in prior month); NAHB Housing Market IndexFebruary (37 expected, 35 during the previous month); Net long-term ICT flowsDecember ($171.5 billion); Total net ICT flowsDecember ($213.1 billion)
Thursday: building permitsJanuary (1.350 million expected, 1.330 million during the previous month, revised to 1.337 million); building permitsmonth-on-month, January (1.0% expected, -1.62% over prior month, revised to -1.0%); housing startedJanuary (1,361 million expected, 1,382 during the previous month); housing startedmonth-on-month, January (-1.6% expected, -1.4% over prior month); New York Fed Services Trading ActivityFebruary (-21.4 during the previous month, revised to -13.7); unemployment claimsweek ending February 11 (200,000 expected, 196,000 during the prior week); ongoing claimsweek of February 4 (1.695 million expected, 1.688 million during the previous week); Philadelphia Fed Business Outlook IndexFebruary (-6.9 expected, -8.9 over prior month); Final Demand PPImonth-over-month, January (0.4% expected, -0.5% over prior month); PPI Excluding Food and Energymonth-on-month, January (0.3% expected, 0.1% over prior month)
Friday: Import Price Indexmonth-on-month, January (-0.1% expected, 0.4% over prior month); Import price index without oilmonth-over-month, January (0.8% over the previous month); Import Price Indexyear-over-year January (2.4% expected, 3.5% over prior month); Export Price Indexmonth-over-month, January (-0.2% expected, -2.6% over prior month); Export Price Indexyear-over-year, January (5.0% over the previous month); main index, January (-0.3% expected, -0.8% over prior month)
earnings schedule
Monday: Advance Auto Parts (AAP), Avis Budget (CAR), Denny’s (DENN), IAC (IAC), Palantir Technologies (PLTR), Vornado Realty Trust (VNO)
Tuesday: Airbnb (ABNB), Coca-Cola (KO), Conduent (CNDT), Devon Energy (DVN), GoDaddy (GDDY), Herbalife Nutrition (HLF), Marriott International (MAR), Peabody Energy (BTU), Restaurant Brands (QSR) ) ), TransUnion (TRU), TripAdvisor (TRIP), Upstart (UPST), Weber (WEBR)
Wednesday: Biogen (BIIB), Boston Beer (SAM), Cisco Systems (CSCO), Fisker (FSR), Kraft Heinz (KHC), Krispy Kreme (DNUT), Marathon Oil (MRO), Roblox (RBLX), Roku (ROKU), Shopify (SHOP), The Trade Desk (TTD), Twilio (TWLO), Upwork (UPWK), Wyndham Hotels & Resorts (WH), Zillow (ZG)
Thursday: BJ Restaurants (BJRI), Bloomin’ Brands (BLMN), Constellation Energy (CEG), ConEdison (ED), Crocs (CROX), Datadog (DDOG), DoorDash (DASH), DraftKings (DKNG), Dropbox (DBX), Hasbro (HAS), Hyatt Hotels (H), Paramount Global (PARA), Shake Shack (SHAK), WeWork (WE)
Friday: AMC Networks (AMCX), AutoNation (AN), Barnes Group (B), Deere (DE)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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