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Economic Calendar - Top 5 Things to Watch This Week

Published 02/10/2019, 07:07 AM
Updated 02/10/2019, 07:07 AM
© Reuters.

Investing.com - Trade-related headlines are likely to be the main driver of sentiment this week, as markets focus on the next round of trade talks between the U.S. and China to see if any more news materializes.

A 90-day trade truce between Washington and Beijing is due to expire on March 1. If the deadline passes without a deal, President Donald Trump has said he could follow through on his threat to increase tariffs on as much as $200 billion worth of Chinese goods.

The week ahead is also peppered with a handful of appearances from Federal Reserve officials, most importantly Chairman Jerome Powell, as investors look for further hints into the outlook for monetary policy in the months ahead.

There is also important U.S. consumer price inflation and retail sales data to pay attention to as investors look for further hints on the strength of the economy.

The Fed recently signaled that its three-year drive to tighten monetary policy is close to an end due to rising headwinds to the economy.

In earnings, about 60 S&P 500 companies are due to report financial results this week, in what will be one of the last big waves of the fourth-quarter earnings season.

Meanwhile, political headlines will remain in focus as Trump and congressional lawmakers have until Friday to agree on a budget deal to avert another partial shutdown of the federal government.

Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.

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1. U.S.-China Trade Talks

A new round of U.S.-China trade talks begins in Beijing, after the most recent set of negotiations concluded in Washington last week without a deal.

Lower-level officials will kick off the meetings on Monday, led on the American side by Deputy U.S. Trade Representative Jeffrey Gerrish.

Higher principal-level talks will then take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

A White House official said on Friday that U.S. negotiators are preparing to press China on longstanding demands, including stealing intellectual property and forcing U.S. companies to share their technology with Chinese firms.

The two sides are trying to hammer out a deal ahead of the March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25% from 10%.

U.S. President Donald Trump said last week he did not plan to meet with Chinese President Xi Jinping before that deadline, dampening hopes that a trade pact could be reached quickly.

2. Fed Speakers

A number of Fed speeches will get market attention in the week ahead, as traders watch for further clues on interest rates.

Topping the agenda will be remarks from Fed Chair Jerome Powell, who will be speaking Tuesday at the Hope Enterprise Corporation Rural Policy Forum, in Mississippi, at 5:45PM ET (22:45 GMT).

Speeches from Fed Governor Michelle Bowman, Cleveland Fed President Loretta Mester, Kansas City Fed President Esther George, Atlanta Fed President Raphael Bostic, and Philly Fed boss Patrick Harker will also be in focus.

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Market expectations for a Fed rate hike this year are hanging by a thread, according to Investing.com's Fed Rate Monitor Tool, after the U.S. central bank last month pledged to be patient with further rate hikes.

3. U.S. Inflation

The Commerce Department will publish January CPI figures at 8:30AM ET (13:30 GMT) Wednesday, which should give clearer signs on the pace of inflation.

Consumer prices are expected to have risen 0.1% last month, according to estimates, compared to December's drop of 0.1%. On a yearly base, CPI is projected to climb 1.5%, down from 1.9% a month earlier.

Excluding the cost of food and fuel, core inflation prices are forecast to have gained 0.2% last month and 2.1% over the prior year.

Weakening inflation will likely add to expectations that the Federal Reserve will need to slow its pace of rate hikes next year.

4. U.S. Retail Sales

The Commerce Department will release data on retail sales for December at 8:30AM ET (13:30 GMT) on Thursday, which investors will be eyeing for further signs on the strength of the American consumer.

The consensus forecast is that the report will show retail sales rose 0.1%, after a 0.2% increase in November. Excluding the automobile sector, sales are expected to post a flat reading.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy. Consumer spending accounts for as much as 70% of U.S. economic growth.

Also on the economic calendar this week will be producer price inflation figures, a preliminary reading on Michigan consumer sentiment, as well as the latest JOLTS report.

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5. Earnings Season Starts to Wind Down

There are about 60 S&P 500 companies reporting results in the week ahead, as the earnings season on Wall Street starts to wind down.

Loews (NYSE:L), Diamond Offshore Drilling (NYSE:DO), Chegg (NYSE:CHGG), and Kemper (NYSE:KMPR) are on the agenda for Monday.

Results from Under Armour (NYSE:UAA), Activision Blizzard (NASDAQ:ATVI), Occidental Petroleum (NYSE:OXY), Shopify (NYSE:SHOP), Dean Foods (NYSE:DF), Groupon (NASDAQ:GRPN), Molson Coors (NYSE:TAP), Akamai Technologies (NASDAQ:AKAM), and Twilio (NYSE:TWLO) will capture the market's attention on Tuesday.

Cisco (NASDAQ:CSCO), Teva (NYSE:TEVA), AIG (NYSE:AIG), Yelp (NYSE:YELP), TripAdvisor (NASDAQ:TRIP), Fossil (NASDAQ:FOSL), MGM Resorts (NYSE:MGM), Marathon Oil (NYSE:MRO), Gannett (NYSE:GCI), Hilton (NYSE:HLT), Hyatt Hotels (NYSE:H), DISH Network (NASDAQ:DISH), and NetApp (NASDAQ:NTAP) report results on Wednesday.

Thursday sees Coca-Cola (NYSE:KO), NVIDIA (NASDAQ:NVDA), Canada Goose (NYSE:GOOS), Cyberark Software (NASDAQ:CYBR), Canopy Growth (NYSE:CGC), Applied Materials (NASDAQ:AMAT), CBS (NYSE:CBS), CME Group (NASDAQ:CME), Six Flags Entertainment (NYSE:SIX), Encana (NYSE:ECA), Duke Energy (NYSE:DUK), Vulcan Materials (NYSE:VMC), GNC Holdings (NYSE:GNC), and Avon Products (NYSE:AVP) post earnings.

Finally, PepsiCo (NASDAQ:PEP), Deere (NYSE:DE), Newell Brands (NASDAQ:NWL), and Enbridge (NYSE:ENB) are among the few reporting on Friday.

-- Reuters contributed to this report

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