It will be a busy week for markets with earnings, inflation data, a parade of Fed-speak and tariff chatter in the background, Prudential’s Chief Market Strategist Quincy Krosby said Monday in her weekly “Connecting the Dots” outlook.
With markets hypersensitive to whether long-dormant inflation is finally stirring and if the Federal Reserve’s plan for three rate hikes needs to be revised higher, this week’s data for the Producer Price Index (PPI) and the Consumer Price Index (CPI) could be important for yields and Fed rate expectations, Krosby said.
“This is the absolute focus this week,” she said, “For capital markets, inflation-related data is key this week. We are already seeing the prices-paid component inching higher.”
Former Fed Chairman Ben Bernanke, San Francisco Fed President John Williams and Boston Fed President Eric Rosengren all will be speaking publicly this week at a Brookings Institution event focused on whether the Fed should rethink the 2 percent inflation target.
The earnings season begins “officially” as banks report at the end of the week. Guidance, especially with a focus on tax-cut benefits, should make headlines, she said. In addition, projections for loan growth, trading revenue and mergers-and-acquisition activity are all key for investors, she said.
Also this week, industry conferences, particularly the major CES technology conference in Las Vegas, formerly called the Consumer Electronics Show, will be followed closely by analysts and traders alike.
And, tariff-related chatter continues to percolate in Washington.
“Perhaps we will hear something coming out of the White House on tariffs,” she said, “While tariffs do not portend a trade war, investors are particularly sensitive that they could lead to one.”
This week’s data releases:
- Tuesday – NFIB Small Business Optimism Index
- Thursday – PPI
- Friday – CPI; retail sales
Read Quincy Krosby’s full Q1 Market Commentary: Turning the Page.
The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This is solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.