From manufacturing to housing to price inflation data, there will be no shortage of government reports on the health of the U.S. economy next week, most of which have the capacity to move markets. And if that wasn’t enough, the Federal Reserve will meet and hand down a decision on interest rate policy.
In other words, traders will need their rest this weekend before the data overload. Too bad they’ll lose an hour of sleep due to daylight savings.
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“This past week was lighter in data, and we had more good news than bad,” says Art Hogan, chief market analyst with Jefferies, specifically noting the better-than-expected retail sales data delivered Friday.
“The question is whether the data next week is more or less supportive,” Hogan adds. “It’s certainly a data-rich week with plenty to go by. It’s a perfect combination of data, and it’ll certainly keep us on our toes.”
On the other hand, James Paulsen, chief investment strategist with Wells Capital Management, says that despite the large volume of economic releases on tap, the next five sessions aren’t filled with data important enough to sway someone’s view of the economy.
“We’re working to debunk the major crisis fear that we’re going to experience a double-dip recession. That’s the bigger picture here,” Paulsen argues. “Usually the most important data is the jobs number and Institute for Supply Management numbers, which come early in the month and set a tone. Those reports, especially ones about the job market, are very important.”
Paul Nolte, with Dearborn Partners, agrees. “The focus is really on earnings and employment, and that’s it,” he says. “That gives you this slow-moving market with not a lot of volume, although we are slowly grinding higher.”
Whether they prove to be important or not, the parade of reports kicks off early Monday with the New York Fed’s Empire State manufacturing index for March at 8:30 a.m. EDT, followed at 9 a.m. EDT by the December report on net long-term TIC flows, which measures capital flows out of the U.S. Fifteen minutes later, the Fed will release more industrial data in the form of production and capacity utilization statistics for February.
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