Traders expect the market to be quiet in the coming week as the March Fed meeting approaches. "With all of the key inflationary data out of the way, the only potential market-moving event ahead of the March 27 and 28 FOMC meeting will be Chairman Bernanke's speech next Monday," says Randy Diamond, sales trader for Miller Tabak. "If Bernanke is to stick to his promise to be more open and transparent, his speech could include hints at what might occur at the Fed meeting, and hence, have significant market impact." Bernanke will give a speech in front of the New York Economic Club on Monday. His topic will be "Reflections on the Yield Curve and Monetary Policy." Also Monday, leading economic indicators for February will be released. Economists surveyed by Thomson First Call expect the index to drop 0.3%, after growth of 1.1% in January. On Tuesday, the most meaningful economic report for the week arrives with the release of the producer price index for February. The PPI indicates the types of inflationary pressures manufacturers are experiencing in the production of their goods. Economists expect the PPI to fall 0.2%, compared with 0.3% growth in January. The core PPI, which excludes food and energy prices, is expected to drop 0.2% after rising 0.4% in January. "Both the bond and stock markets will watch this report carefully, looking for any additional signs of rising prices in the production process," says Robert Pavlik, chief investment officer at Oaktree Asset Management. "The trend for the overall report has been on the rise, while the core appears as though it may have reached a top."
Pavlik says the market should continue its recent rally if Tuesday's PPI report comes in below expectations on the hope that the Fed will stop its rate-hike campaign after its next meeting. According to Miller Tabak, the market is now priced for 100% odds of a 25-basis-point hike at the March 28 meeting. Odds of an additional quarter-point hike at the May meeting fell to 76% after Friday's in-line consumer price index report. On Thursday, the National Association of Realtors will release its existing-home sales report for February. The sales report -- which includes sales of single-family houses, townhomes, condominiums and co-ops -- is expected to show a decline to a seasonally adjusted annual rate of 6.50 million units, from 6.56 million in January. "The home sales report should draw some additional attention, since the homebuilder stocks have rebounded some in the last few days," says Pavlik. "Although the recent rebound may have more to do with the fact that interest rates have been cooperating as of late due to the benign CPI report." More data on the housing market are on tap for Friday with the release of new-home sales figures. Economists anticipate that February new-home sales fell to an adjusted annual rate of 1.21 million, down slightly from 1.23 million in January. The February durable-goods report is also on tap for Friday. Orders for durable goods -- items designed to last longer than one year -- are expected to rise 1.1%. In January, a drop in aircraft orders caused a 9.9% plunge. "Unless we get a negative surprise on a piece of economic data that's really out of the ordinary, then it's going to be a subdued week with the Fed meeting right around the corner," says Ken Tower, chief market analyst with CyberTrader.
Retail and Tech on TapWall Street may be closer to first-quarter preannouncements than to earnings season, but there are still a few notable names set to report results in the coming week. Companies scheduled to release earnings Monday include Sonic ( SONC), Williams-Sonoma ( WSM) and Shuffle Master ( SHFL).
Also taking the stage Monday will be software giant Oracle ( ORCL). Analysts surveyed by Thomson First Call expect the company to post earnings of 18 cents a share, up from the 16 cents a share earned last year, on revenue of $3.53 billion. On Tuesday, the market will hear from the likes of Dollar General ( DG), Gamestop ( GME) and Nike ( NKE). Analysts expect the sneaker giant to post earnings of $1.09 a share, compared with EPS of $1.01 last year, on revenue of $3.52 billion. Big names in the earnings spotlight on Wednesday will be Jabil Circuit ( JBL), Adobe Systems ( ADBE) and Darden Restaurants ( DRI). Shipping giant FedEx ( FDX) also will report Wednesday, and KB Home ( KBH) will add to this week's home-sale data to provide more color on the state of the housing sector. Thursday will see the heaviest flow of earnings reports in the coming week, with numbers coming from Family Dollar ( FDO), Finish Line ( FINL), Palm ( PALM) and 3Com ( COMS). General Mills ( GIS) also reports results on Thursday. The food producer is expected to report earnings of 65 cents a share, down from 74 cents a share a year ago, on $2.85 billion in revenue.