The Federal Reserve's meeting in March is creeping closer, but markets remain skeptical that an interest rate hike will come so soon. Fed speakers, however, in the coming week could change a few minds.
Minutes from the January-February meeting and a string of Fed officials warning against the central bank acting too late has done little to significantly raise the chances of a March rate hike in the eyes of investors. The probability of a move next month still sits at roughly 35%.
"It's higher than what the markets are saying," Bodhi Ganguli, lead economist at Dun & Bradstreet, told TheStreet, noting that the real probability is around 50-50. "If we do get an exceptionally strong jobs report and ... there are signals that there's definite progress on policy that's going to be stimulatory and inflationary then the Fed has every reason to move in March."
Fed Chair Janet Yellen will deliver the week's most important comments in an address at the Executives' Club of Chicago on Friday. Vice Chairman Stanley Fischer will also speak on Friday, delivering the keynote speech at the 2017 U.S. Monetary Policy Forum.
Dallas Fed President Robert Kaplan, Kansas City Fed President Esther George, San Francisco Fed President John Williams, St. Louis Fed President James Bullard, Cleveland Fed President Loretta Mester, and Chicago Fed President Charles Evans also deliver comments throughout the week.
The last batch of economic data with Barack Obama as president will come out in the next few weeks with the coming sessions looking particularly busy. Durable goods orders and pending home sales for January will be released on Monday; the second estimate of fourth-quarter GDP, international trade for January, Chicago PMI and consumer confidence for February is set for Tuesday; personal income and outlays for January, the ISM Manufacturing Index for February, and the Beige Book is due for release on Wednesday; and the ISM Non-Manufacturing Index for February is scheduled for Friday.
Meanwhile, the economy under a Trump administration is still taking shape with very little detail on tax changes and infrastructure spending coming from the White House. Should details surface in the coming week, markets could rally. The Dow Jones Industrial Average has already reached new records on just the hint of stimulatory tax reform.
Retailers will continue to showcase their quarterly performances over the critical holiday quarter. Slower traffic at malls and cautious consumer spending are expected to have contributed to retail weakness, a common refrain among retailers who have already reported. Even so, retail earnings are expected to increase by 5.2% over the fourth quarter, according to Thomson Reuters estimates.
In retail, Target (TGT - Get Report) and Etsy (ETSY - Get Report) will report on Tuesday; American Eagle Outfitters (AEO - Get Report) , Best Buy (BBY - Get Report) , Dollar Tree (DLTR - Get Report) , Lowe's (LOW - Get Report) and Vitamin Shoppe (VSI - Get Report) on Wednesday; and Abercrombie & Fitch (ANF - Get Report) , Costco (COST) , and Barnes & Noble (BKS) on Thursday.
Also on the earnings calendar, Workday (WDAY - Get Report) will report on Monday; 3D Systems (DDD - Get Report) , AMC Entertainment (AMC - Get Report) , Dominos Pizza (DPZ - Get Report) , Heico (HEI - Get Report) , Palo Alto Networks (PANW - Get Report) , Salesforce (CRM - Get Report) , Valeant Pharmaceuticals (VRX) , Weight Watchers (WTW) and XO Group (XOXO) on Tuesday; Box (BOX - Get Report) , Broadcom (AVGO - Get Report) , Planet Fitness (PLNT - Get Report) and Shake Shack (SHAK - Get Report) on Wednesday; Anheuser-Busch (BUD) , Autodesk (ADSK - Get Report) , Kroger (KR - Get Report) , Marvell Tech (MRVL - Get Report) , Noodles & Co. (NDLS - Get Report) , and Wingstop (WING - Get Report) on Thursday; and Revlon (REV - Get Report) on Friday.