Global investors saw a second inflation surprise recently, which led to the overall decline for equity markets. This impacted the stocks, as the US frontline indices ended the week in losses. Producer price index was stronger than anticipated, even though the difference was marginal. PPI saw an increase of 0.3% in January, rather than 0.1% expected by the economists.
Why US Frontline Indices Ended lower this week?
All 3 key major U.S. indices closed lower on Friday, breaking 5-week momentum of increases. Therefore, benchmark treasury yields increased to close to ~4.3%. Investors experienced slew of economic data points, which included hot consumer prices, lower-than-anticipated retail sales, and different and dicey views regarding when can the US Fed start to cut interest rates.
Well, with all these numbers and views flowing in, markets had all the reasons to close the week in negative.
Earnings season continued in its full swing, with nearly four-fifths of S&P turning in results for latest quarter. The US markets are closed on Monday on account of President’s Day.
However, investors have a lot of economic data points to digest in this week.
Experts overview on US Market
After US frontline indices ended the week in losses, investors are expected to look forward to earnings data from leading companies such as Palo Alto Networks, Walmart, Home Depot, etc. on Tuesday.
Analysts and experts expect disappointing numbers from the retailers such as Walmart and Home Depot. And they have valid points too, supported by macro data indicators.
Walmart is expected to report a decline in earnings and Home Depot’s business might get impacted due to the lower sales volumes.
On Wednesday, Nvidia, Suncor Energy, Rivian Automotive, etc. are expected to report earnings. Apart from this, the US Federal Reserve is expected to release minutes from its policy meeting conducted in January. This should provide more insights into officials’ view regarding the interest rates.
Earnings from the AI giant, Nvidia, should be the highlight for the day as analysts continue to expect it to report another strong quarter. Its stock has made milestones over the recent weeks, touching record highs and surpassing Google parent Alphabet as 3rd largest US company in terms of market cap.
On Thursday, a number of macro-economic data is expected to be published, which should provide some direction to the overall market momentum. Initial jobless claims data, for the week ending February 17, is expected to be out along with S&P flash services PMI (for February 2023).
S&P flash manufacturing PMI (February) and existing home sales (January) are also expected to be released on Thursday.
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