Several events with market-moving potential are taking place this week.
As the March 1 trade deal deadline nears, the U.S. and China continue to work towards a resolution. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will be traveling to China for more trade-related talks. Investors were rattled last week after White House economic advisor Larry Kudlow said that there was a “pretty sizable distance to go” before the Washington and Beijing could reach a comprehensive trade deal. Those comments sent the market into a frenzy.
Then on Friday, the Wall Street Journal reported that the two feuding nations had not even put together an accord laying out trade agreements and disagreements. With less than one month before the U.S. tariffs increase to 25%, investors will be waiting for any incrementally positive news out of Beijing this week.
Earnings season will continue with 60 S&P 500 companies gearing up to report this week. Coca-Cola, Pepsi, Cisco, Activision Blizzard and Under Armour are some of the biggest names reporting this week.
On Wednesday, the Bureau of Labor Statistics will be releasing the Consumer Price Index (CPI) data for January. “Falling oil prices should continue to weigh on the energy category, where we see prices falling 1.8%. Food prices should provide just a partial offset with a 0.3% gain. Altogether, we see headline CPI rising 0.06% after a 0.06% drop in December,” Morgan Stanley wrote in a note on Friday.
The Federal Reserve often looks to CPI data as a key inflation gauge. Given that the central bank has indicated that they will be “patient” and “data-dependent,” the CPI data will play an even more critical role.
Finally, Friday, February 15 is the temporary funding deal deadline and the government faces another potential shutdown. “The Democrats on the committee presumably won’t agree to fund Trump’s wall which, given Trump’s comments this week, would suggest a new shutdown is unavoidable,” Capital Economics wrote in a note on Friday. “Nevertheless, we would be surprised if Trump rushed into another politically damaging closure so soon.”
Monday: Consumer Price Index (revisions)
Tuesday: NFIB Small Business Optimism, January (103.0 expected, 104.4 prior); JOLTS Job Openings, December (6888 prior); Producer Price Index (revisions)
Wednesday: MBA Mortgage Applications, week ending February 8 (-2.5% prior); CPI month-on-month, January (+0.1% expected, -0.1% prior); CPI excluding Food & Energy month-on-month, January (+0.2% expected, +0.2% prior); CPI year-on-year, January (+1.5% expected, +1.9% prior); CPI excluding Food & Energy year-on-year, January (+2.1% expected, +2.2% prior); Monthly Budget Statement, December (-$11.0B expected, -$204.9B prior)
Thursday: PPI Final Demand month-on-month, January (+0.1% expected, -0.2% prior); PPI excluding Food & Energy month-on-month, January (+0.2% expected, -0.1% prior); PPI Final Demand year-on-year, January (+2.1% expected, +2.5% prior); PPI excluding Food & Energy year-on-year, January (+2.5% expected, +2.7% prior); Initial Jobless Claims, week ending February 9 (225,000 expected, 234,000 prior) Continuing Claims, week ending February 2 (1.736 million prior); Retail Sales Advance month-on-month, December (+0.1% expected, +0.2% prior); Retail Sales excluding Auto month-on-month, December (0.0% expected, +0.2% prior); Retail Sales excluding Auto & Gas, December (+0.4% expected, +0.5% prior); Bloomberg Consumer Comfort, week ending February 10 (58.2 prior)
Friday: Empire Manufacturing, February (7.5 expected, 3.9 prior); Import Price Index month-on-month, January (-0.1% expected, -0.1% prior); Industrial Production month-on-month, January (+0.1% expected, +0.3% prior); Capacity Utilization, January (78.8% expected, 78.7% prior); University of Michigan Sentiment, February (94.0 expected, 91.2 prior); Net Long-term TIC Flows, December ($37.6B prior); Total Net TIC Flows, December ($31.0B prior)