Markets ended a volatile week on a down note, as semiconductor stocks reversed course and jobs data came in mixed. All four major benchmarks closed the week in the red, reversing two weeks of increases.
Investor optimism dissipated as Nvidia (NVDA) stock fell on profit-taking, weighing on investor sentiment, and February’s stronger-than-expected payroll growth employment report was another indication that interest rates will not be decreased soon. Markets brushed aside the fact that the unemployment rate ticked higher and wage growth cooled down, as a surge in hiring pointed at a still tight job market.
Overall, the jobs data supported the Federal Reserve’s “on hold” stance, keeping the odds of a June rate cut unchanged. This week, the markets will be focusing on the economic reports concerning the second part of the central bank’s dual mandate, price stability.
Four Economic Events
Here are four economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» February’s CPI and CPI ex. Food and Energy (Core CPI) – Tuesday, 03/12 – The CPI report is one of the two key indicators used to measure inflation (the second one is the Personal Consumption Expenditures, or PCE). Policymakers, businesses, and consumers closely watch the CPI report, as it reflects the price trends in the economy, shapes consumer spending and business outlooks, and directly affects the Federal Reserve’s policy rate decisions.
» February’s Producer Price Index (PPI) – Thursday, 03/14 – This report reflects input prices for producers and manufacturers. Since PPI measures the costs of producing consumer goods – directly affecting retail pricing – PPI is seen as a good pre-indicator of inflationary pressures. This makes it a leading indicator for the following month’s CPI. Thus, the PPI directly impacts the overall inflation outlook among policymakers.
» February’s Retail Sales – Thursday, 03/14 – This report provides information on the amount of money consumers are spending on various durable and non-durable goods. It helps to gauge the economy’s health and consumer spending habits, as well as the level of the buy-side inflation pressures.
» March’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations (preliminary readings) – Friday, 03/15 – These reports portray the results of a monthly survey of consumer confidence levels and consumers’ views of long-term inflation in the United States. The level of confidence affects consumer spending, which contributes about 70% of the U.S. GDP. The inflation expectations index is used as a component of the Fed’s Index of Inflation Expectations calculations.
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