The U.S. Week Ahead (Feb 18-22), Back To The Wall

By Steven Levine, Senior Market Analyst, Interactive Brokers


Although economic releases on the U.S. calendar in the week ahead will be rather light amid the observance Monday in honor of Presidents' Day there will still be several salient data points and corporate events on tap.

Monday, February 18

  • Federal Holiday

Most government offices, courts and banks will be closed Monday in honor of Presidents' Day. 

Market participants may take this time to reflect on the progress of the current U.S. administration, amid on-going trade negotiations with China, President Donald Trump’s declaration of a national emergency to secure funding for border security, as well as the wind-down of earnings season as retailers get set to announce their results following December’s worst retail sales report in nearly a decade.

Briefing.com’s chief market analyst Patrick O’Hare noted that the “worst retail sales report in nearly ten years triggered a decline in the S&P 500 of exactly 7.3 points, or 0.27%.In other words, that report did almost nothing to upset a market that has surged nearly 400 points, or 16.8%, since its low on December 24.”

(Click on image to enlarge)

O’Hare said that the market is “enjoying an out-of-body experience right now, where it floats above weak data and downward earnings revisions, supported by reports that the U.S. and China are making progress toward a trade agreement -- or at least progress toward an agreement not to make things worse -- and that the Federal Reserve is progressing toward a more dovish-minded policy stance.”

He described the behavior as “a meditative practice that has been a calming influence following the volatility of the fourth quarter, yet the duration of the meditative period makes one wonder just how long it can last.”

Tuesday, February 19

  • NAHB Housing Market Index (Feb)

The week kicks off in earnest Tuesday with an update on the NAHB/Wells Fargo National and Regional HMI, after January’s data ticked up to 58 from 56 in the prior month – and came in stronger-than-expected. 

The latest gauge generally suggested some strengthening in the housing sector following a bout of downbeat sales and construction data, which had signaled a slowdown throughout the fourth quarter of 2018.

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The author does not hold any positions in the financial instruments referenced in the materials provided.

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