By Steven Levine, Senior Market Analyst, Interactive Brokers

While the U.S. landscape is littered with government policy uncertainties, including over trade talks with China and the EU, as well as relationship troubles with North Korea, the Federal Reserve’s patient stance on monetary policy changes has generally helped resuscitate risk appetite.

The S&P 500 was up about 0.25% on the day Friday and more than 11.3% year-to-date, while the yield on the 10-year U.S. Treasury note had made a new 52-week high of 2.741%.

Against this backdrop, investors in the week ahead will be eyeing some salient economic updates, including December’s new home sales and trade figures, as well as the all-critical employment report for February.

Meanwhile, on the corporate front, Swiss bank UBS will be hosting its eighth annual Global Consumer and Retail Conference.

The week shifts into gear with—

Monday, March 4

• Construction Spending (Dec)

Construction Spending data was last released for the November period by the U.S. Census Bureau when it rose 0.8% month-over-month to nearly 1.3m. Since the Census Bureau was one of many agencies closed during the historic, 35-day partial government shutdown, which lasted from December 22, 2018, until January 25, 2019, the updates being provided Monday reflect a delay.

Tuesday, March 5

• Markit Services PMI (Feb)
• ISM Non-Manufacturing PMI (Feb)
• New Home Sales (Dec)
• API Crude Oil Stocks

Among the reports due out Tuesday, investors will receive fresh figures from the IHS Markit U.S. Services Business Activity Index after January signaled a further upturn across the sector.

While a sustained rise in new orders and client demand was mainly attributed to the rise in business activity, IHS Markit observed that the uptick in output was the slowest in four months – one of the “softest increases in new business” in over a year – and employment growth eased to the second-weakest since June 2017.

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The index gauge registered 54.2 in January, down slightly from 54.4 in the prior month.

IHS Markit chief business economist Chris Williamson said that the “robust economic growth” indicated by the US PMI surveys at the start of the year “sits in stark contrast to the near-stalling of growth seen in Europe, China, and Japan.

“At current levels, the surveys are consistent with annualized GDP growth of around 2.5% at the start of the year.”

Williamson further noted that rates of economic growth, job creation and inflation suggested by the PMI surveys have “cooled since peaks seen last year,” possibly reflecting “some impact from the government shutdown,” as well as easing of demand growth, especially from abroad. He added that foreign sales of goods and services “barely rose in January, contrasting with signs of faster growth of domestic orders.”

Also, Tuesday, the U.S. Census Bureau and the Department of Housing and Urban Development are set to release delayed new residential sales data for December.

Sales of new single-family houses in November 2018 grew at a rate of 657,000, a rise of 16.9% above October’s revised rate of 562,000, but 7.7% less than the same year-ago month.

By mid-week, market participants will be on the lookout for—

Wednesday, March 6

• ADP Employment (Feb)
• Trade Balance (Dec)
• EIA Crude Oil Stocks

ADP’s National Employment Report is typically considered a runup to the more critical nonfarm payrolls numbers that follow later in the week from the Bureau of Labor Statistics (BLS).

Private sector employment in January rose by 213,000 jobs, suggesting a still-healthy U.S. labor market.

ADP Research Institute co-head Ahu Yildirmaz noted that the employment situation continued its pattern of “strong growth with little sign of a slowdown in sight.”

Indeed, industries across the board experienced growth, with manufacturing adding the most jobs in more than four years, and with mid-sized businesses continuing to lead job creation, albeit the share of jobs was spread somewhat more evenly across all company sizes.”

Mark Zandi, the chief economist of Moody’s Analytics, said that the job market “weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls. As long as businesses hire strongly the economic expansion will continue on.”

Rounding out the week, investors will be closely watching—

Friday, March 8

• Non-farm Payrolls Report (Feb)

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The BLS reported a rise of 304,000 total nonfarm payroll jobs in January, while the unemployment rate edged up to 4.0% from 3.9% in December 2018 -- likely due to the partial government shutdown. Job gains occurred in several industries, including leisure and hospitality, construction, health care, and transportation and warehousing. 

Average hourly earnings (AHE) for all private sector workers rose 0.1% month-over-month for a 3.2% year-over-year increase – the sixth straight time it has risen by 3.0% or more.

The labor force participation rate, at 63.2% in January, was little over the month and up by 0.5% over the year.

Jefferies’ chief financial economist Ward McCarthy noted that while “the rate of improvement remains erratic, the labor market continues to be on track for continued solid job growth. Continued declines in the unemployment rate are also likely, but limited unless the participation rate resumes a declining trend.” 

The Corporate Front

Elsewhere, on the corporate front, UBS will host its eighth annual Global Consumer and Retail Conference from Wednesday, March 6 through Thursday, March 7 at the Four Seasons Hotel in Boston.

The two-day event aims to provide insights into upcoming sector trends with keynote speeches, panel discussions, and networking opportunities.

Among the roughly 60 companies slated to attend are Anheuser-Busch InBev (NYSE: BUD), Best Buy (NYSE: BBY), Hasbro (Nasdaq: HAS), Keurig Dr Pepper (NYSE: KDP), Mondelez International (Nasdaq: MDLZ), Procter & Gamble (NYSE: PG), WalMart (NYSE: WMT), WW (Nasdaq: WTW - formerly known as Weight Watchers International) and Yum! Brands (NYSE: YUM).

Investors in discretionary sector stocks would likely find interest in the event, after certain of these companies’ stocks recently made outsized moves after their latest quarterly earnings announcements.

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WW’s shares Wednesday, for example, plunged more than 30%, while Best Buy’s stock rose over 15%.

Analysts at Finimize noted that WW “hasn’t just changed its name: it’s in the middle of rebranding itself as a wellness company. Either that’s not working so well – or it’s working too well, and its subscribers don’t need it anymore.”

WW’s Q4’18 earnings were released late Tuesday – but Finimize observed the Oprah-backed company’s profit was “well off its target weight, and it shed subscribers for the third quarter in a row.” WW also said that 2019 wasn’t going as well as hoped, lowering its outlook for the year. 

In other news, U.S. electronics retailer Best Buy beat most analysts’ expectations and raised its 2019 outlook, citing powerful demand for wearables, appliances, and games consoles. Finimize added that “the good news was a welcome relief for investors after Home Depot and Macy’s reported lackluster results – and retail bellwether Walmart neglected to raise its own 2019 outlook last week.”

As earnings season comes to a close, many investors focusing on retail may glean further, firsthand insights into the direction of WW, Best Buy and others.

In the meantime, select the Event Calendar option in the IBKR Trader Workstation for a full list of the U.S. and global corporate events and earnings, dividend schedules, economic data, IPOs and more.