Markets concerned stimulus, vaccine-led growth will fuel inflation
Federate Hermes portfolio manager Steve Chiavarone says he’s ‘bullish’ on economic recovery on ‘The Claman Countdown.’
The upcoming week will be jam-packed with economic data including the Federal Reserve's Beige Book, and earnings from over a dozen big names including JPMorgan, Goldman Sachs and Delta Airlines.
Investors will also pay close attention to the initial public offering of Coinbase on Wednesday and President Biden's first meeting with a foreign leader since taking office, which is slated for Friday.
FOX Business takes a look at the upcoming events that are likely to move financial markets in the coming days with the S&P 500 and the Dow Jones Industrial Average sitting at records, while the Nasdaq Composite exiting correction territory on Friday.
|I:DJI||DOW JONES AVERAGES||33800.6||+297.03||+0.89%|
744,000 AMERICANS FILE FOR FIRST-TIME JOBLESS BENEFITS
Monday will be the calm before the economic data storm, with the federal budget balance set to be the day's main event. Signet will be a stock to watch as the jewelry giant holds a virtual investor day, where it will reveal details for the upcoming phase of its growth strategy, dubbed Inspiring Brilliance.
|SIG||SIGNET JEWELERS LTD||61.08||+3.49||+6.06%|
Federal Reserve Bank of Boston President Eric Rosengren will also give remarks on the economic outlook ahead of a virtual event hosted by the Newton-Needham Regional Chamber.
Small businesses will be in focus on Tuesday with the National Federation of Independent Business (NFIB) releasing its small business optimism index for the month of March.
About 40% of business owners reported in February that job openings could not be filled, a seven-point increase from January. Owners expecting better business conditions over the next six months increased to a net negative of 19% and earnings trends from the prior three months improved five points to a net negative of 11% reporting higher earnings compared to January's reading.
Other economic data being released on Tuesday include the consumer price index for March. The CPI Index rose 0.4% in February with an annual increase of 1.7%.
Federal Reserve Bank of Minneapolis will also hold a virtual event called "Racism and the Economy: Focus on the Economics Profession", with Federal Reserve bank presidents Esther George, Mary Daly, Raphael Bostic, Loretta Mester and Eric Rosengren participating in discussions or giving remarks throughout the day. Federal Reserve Bank of Philadelphia President Patrick Harker will also speak virtually at an economic outlook event with the Delaware State Chamber of Commerce.
The Senate will also hold a series of hearings on Tuesday including the Senate Economic Policy Subcommittee's examination of the student debt burden and its impact on racial justice, borrowers, and the economy, and the Senate Commerce, Science and Transportation committee's hearing examining the state of travel and tourism during COVID-19 pandemic.
MANUFACTURING STRONGEST SINCE 1983
On Wednesday, a slew of earnings will be released including JPMorgan, Goldman Sachs and Wells Fargo as well as Bed Bath & Beyond, all before the opening bell.
|JPM||JPMORGAN CHASE & CO.||156.39||+1.21||+0.78%|
|GS||THE GOLDMAN SACHS GROUP, INC.||331.00||+0.13||+0.04%|
|WFC||WELLS FARGO & CO.||40.50||+0.44||+1.10%|
|BBBY||BED BATH & BEYOND, INC.||30.03||+0.40||+1.35%|
The day will also mark Coinbase's debut on the NASDAQ. The company will begin trading through a direct listing under the ticker symbol COIN. The cryptocurrency exchange operator's IPO was delayed after the company was hit by an investigation from the Commodity Futures Trading Commission. The company agreed to pay $6.5 million to settle regulatory claims that it reported misleading information about its trading volumes, though it did not admit to or deny the regulator's allegations.
Coinbase, which was founded in 2012 as a platform to trade bitcoin, has 43 million users and serves 7,000 institutional customers, according to the company's prospectus filing.
On the economic front, the Federal Reserve will release the Beige Book. In February, the Fed's monthly survey indicated increased optimism about a strong economic rebound as COVID-19 vaccine distribution ramps up.
Moderna will also hold a virtual Vaccine Day for analysts and investors, where the company's leadership and key opinion leaders will discuss Modern'a mRNA vaccines and key considerations for vaccine development. According to the Centers for Disease Control and Prevention, Moderna's COVID-19 vaccine accounts for over 78 million of the more than 171 million doses administered to date in the United States.
Shareholders from Aphira and Tilray will also vote on the companies' proposed $3.9 billion merger. Under the terms of the deal, Aphria shareholders will receive 0.8381 Tilray shares for each Aphria share they own. Tilray shareholders won’t see an adjustment in their share counts. Aphria shareholders will own 62% of the new company.
Federal Reserve Bank of New York President John Williams will also participate in a moderated discussion organized by the Rutgers Finance Society and the Federal Reserve Bank of Dallas will host a virtual Global Perspective series, including a conversation on national and global economic issues moderated by President Robert Kaplan.
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In addition to the Labor Department's weekly report of initial and continuing jobless claims, the Department of Commerce will release its reports on retail sales and business inventories for the month of March.
The number of Americans filing first-time unemployment benefits unexpectedly rose to 744,000 for the week ending April 3. Meanwhile, continuing claims for the week ending March 27 fell to 3.734 million from the prior week’s downwardly revised 3.75 million.
Retail sales fell more than expected in February as consumers pulled back on their spending, with the value of total sales in February decreasing 3% from the prior month. Manufacturing’ and trade inventories for January, adjusted for seasonal variations but not for price changes, increased 3% to estimated at an end-of-month level of $1,982.4 billion but were down 1.8 percent% from January 2020.
Other economic data to keep an eye on include the Empire State Manufacturing Index and the Philadelphia Fed Manufacturing Index as well as the Federal Reserve's March report on U.S. industrial production and capacity utilization. U.S. manufacturers expanded in March at the fastest pace in 37 years, a sign of strengthening demand as the pandemic wanes and government emergency aid flows through the economy. The Institute for Supply Management, a trade group of purchasing managers, said that its measure of factory activity jumped to 64.7 in March, compared to 60.8 the previous month, the highest reading since December 1983.
Wrapping up Thursday's economic reports will be the National Association of Home Builders/Wells Fargo Housing Market Index for the month of April. In March, the index declined 2 points to 82. While down from its November high of 90, the index was up from a level of 72 a year ago. Any number over 50 indicates more builders view conditions as good rather than poor. The index's March reading of current sales conditions declined 3 points from the previous month to 87 while sales expectations for the next six months rose 3 points to 83 and buyer traffic held steady at 72.
|BAC||BANK OF AMERICA CORP.||40.00||+0.28||+0.70%|
|DAL||DELTA AIR LINES INC.||49.26||-0.58||-1.16%|
|JBHT||J.B. HUNT TRANSPORT SERVICES, INC.||169.51||+1.90||+1.13%|
|UNH||UNITEDHEALTH GROUP, INC.||376.30||+11.41||+3.13%|
Thursday will be a big earnings day as Bank of America, BlackRock, Charles Schwab, Citigroup, Delta Air Lines, JB Hunt Transportation Services, PepsiCo, Rite Aid, Truist Financial, United Health Group, US Bancorp are all set to report before the market open, while Alcoa and PPG Industries will report after the bell.
Marvell and Inphi shareholders will also hold a vote on a proposed $10 billion acquisition to create a $40 billion semiconductor powerhouse.
|MRVL||MARVELL TECHNOLOGY GROUP LTD.||49.60||-0.78||-1.55%|
Under the terms of the agreement, Inphi shareholders will receive $66 cash and 2.323 Marvell shares for each Inphi share they own. Marvell shareholders will own 83% of the combined company while Inphi shareholders will control the remaining 17%.
The transaction is expected to create $125 million in synergies that will be realized within 18 months of closing.
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On Friday, President Biden will meet with Japan Prime Minister Yoshihide Suga at the White House, his first meeting with a foreign leader since taking office in January. Biden and Suga are expected to discuss ramping up a new trade alliance to bolster semiconductor production as the world faces crippling chip shortages prompted by the coronavirus pandemic and the U.S. trade war with China.
As for economic data, the Commerce Department's new residential construction report for the month of March and the University of Michigan's consumer sentiment index for April will finish out the week.
In February, privately-owned housing units authorized by building permits hit a seasonally adjusted annual rate of 1.682 million, about 10.8% below the revised rate of 1.886 million but higher than the February 2020 rate of 1.438 million. Single-family authorizations in February hit a rate of 1.143 million, 10% below the revised January figure of 1.270 million, and February authorizations of units in buildings with five units or more were at a rate of 495,000.
Privately-owned housing starts in February reached a seasonally adjusted annual rate of 1.421 million, 10.3% below the revised January estimate of 1.584 million and 9.3% below the February 2020 rate of 1.567 million. Single family housing starts in February were at a rate of 1,040 million, 8.5% below the revised January figure of 1,136,000, and the February rate for units in buildings with five units or more was 372,000.
Meanwhile, the University of Michigan's Consumer Sentiment index rose to 84.9 in March, up from a level of 76.8 in February. While below March 2020's level of 89.1, the increase was substantially ahead of the April 2020 low of 71.8. The index's expectations component saw a sizeable gain to 79.7 in March compared to the previous month's level of 70.7 and the current conditions index rose to 93 in March compared to February's 86.2 reading.
|ALLY||ALLY FINANCIAL INC.||47.15||+0.08||+0.17%|
|BK||THE BANK OF NEW YORK MELLON CORP.||48.64||+0.63||+1.31%|
|CFG||CITIZENS FINANCIAL GROUP, INC. (RHODE ISLAND)||45.37||+0.66||+1.48%|
|KSU||KANSAS CITY SOUTHERN||262.20||0.00||0.00%|
|PNC||PNC FINL SVC||180.21||+2.10||+1.18%|
Earnings to watch before the opening bell on Friday include Ally Financial, Bank of New York Mellon, Citizens Financial, Kansas City Southern, Morgan Stanley, PNC Financial Services, State Street.
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