Last week was another magic week for Nvidia (NVDA) cracking the $950 level and dragging the market along for the ride. Powell’s testimony in the House looked to be received pretty positively by the markets and additionally, the Non-Farm Payrolls came out with a huge beat. All this led the S&P 500 ($SPX) (SPY) to finish the week down around a 0.2%.
This week we have Day Light Savings starting in the US and the Futures contracts are going to Roll to the June contract (for quarterly contracts). We also have plenty of inflation data coming in and Friday is a quarterly expiration for equities options.
Here are 5 things to watch this week in the Market.
Earnings
Earnings are still something that should be watched, but the large, market-moving companies are behind us now. This week there are a few companies to keep an eye on for potential insight into the overall economy, but even those are few.
First up is Dollar Tree (DLTR) reporting Wednesday morning before the bell. If you are in the stock, the actual report is obviously important to you. If you aren’t then looking to see how traffic, sales, and other pieces of qualitative information could point to the strength of the economy as a whole. Second is Dollar General (DG) which comes out Thursday before the bell. This report is important for similar reasons as Dollar Tree.
These types of stores tend to see additional traffic and sales as the economy tightens, so any abnormal spikes in these measures could be an indication of things to come.
CPI
Tuesday at 8:30 CPI and Core CPI are both due to come out. These are obviously some pretty important inflation numbers given how many people are still feeling the sting of higher prices. We could be back to normalcy with this report, if we see the inflation numbers come in lower than expected the markets could rally on hopes of additional cuts. If we come in hot though we could be in for some selling on the assumption that a cut will get pushed further out.
Bond Auctions
There is both a 10-year and a 30-year bond auction on Tuesday and Wednesday respectively at 1:01 PM Eastern. These auctions are becoming increasingly important due to the fact that they can show investor confidence in the economy. If they are poor auctions, it can be seen as a lack of faith in the economy as investors require additional yield for the money. If it comes in strong though the exact opposite is true.
PPI
Both PPI and Core PPI are due Thursday before the market opens, and very similar to CPI are a gauge of inflation on producers. Also similar to CPI, if the PPI numbers come in hotter than expected we could see the market start to sell on fears of rate cuts being less likely. If we come in cooler than expected we could see the market rally on renewed cutting hopes. It's important to remember on both CPI and PPI though, as long as it's a positive number it is still indicating rising prices and costs.
Retail Sales
The last thing to watch for the week is Retail Rales which is also out Thursday before the market opens. We saw a pretty solid contraction last month and a revision of January's numbers. This is an indicative number of the value of goods sold, so if retail sales continue to drop, even at the new higher prices, it could be seen as a significant decrease in the amount of purchasing being done. This could be due to higher rates or just higher prices, but either way, it could be seen as a bad thing for the overall economy.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
