Good morning. Good Monday. Good markets. Welcome to the week ahead on Wall Street and a look at what investors need to know for the next five days.
There will be plenty to chew on this week. Central banks again will be in the news. There will be lots of voices heard in Washington. Oh, and the week ends with a really big economic report.
Here's what we've got cooking:
While the market will occupy itself will all sorts of news over the week, the most important comes Friday. That's the day the Bureau of Labor Statistics presents its nonfarm payrolls count for February, a number that will have broad implications.
For now, Wall Street — per FactSet estimates — is expecting the report to show 185,000 jobs created during the month, and the unemployment rate down a notch to 4.7 percent. While respectable, that jobs number would represent a significant drop from the 227,000 reported in January, smashing analysts' estimates.
Some folks think the Street is in for another pleasant surprise.
Andrew Hunter, a U.S. economist at Capital Economics, figures the actual number will be closer to 240,000. The big payroll gain in January "was no fluke" he said, and a strong February reading is bolstered by a series of economic reports that show U.S. companies are gearing up to hire.
The jobs number is more than just something for traders to ruminate on.
Federal Reserve officials have indicated in recent days that they are leaning strongly toward hiking short-term interest rates by a quarter point at their meeting this month. A strong jobs report would give the Fed further cover to show that a hike is justified and that the economy can weather higher rates.
Also, the nonfarm payrolls report will serve as an important grade for the first full month of the Trump administration. The new president has been promising robust economic growth, and that starts with job creation.
U.S. central bank officials are prohibited from talking to the press this week in the run-up to the March 14-15 meeting of the Federal Open Market Committee, which makes monetary policy. However, that won't stop the market throughout the week from handicapping what the Fed will do.
One good clue could come Thursday when the European Central Bank meets.
The Fed's closest global counterpart isn't expected to do much in terms of rates. However, the ECB could tinker with the language in its statement to show that it's going to ease its foot off the pedal a bit in terms of its easy-money policy.
One of the big worries about the Fed's plan to tighten its own policy is that it will be doing so at a time when its peers around the world are still loose. An indication that the ECB is ready to normalize the money supply also would make the Fed's decision easier.
Back on the jobs issue: During his successful presidential campaign, Trump repeatedly lambasted government statistics, with particular ire toward the jobs numbers.
So what happens now? If the February number comes in weak, will the president continue his criticism? If it comes in strong, will he look disingenuous if he boasts?
The answers matter on both the market and political levels. Democratic legislators have urged Trump not to undermine his own department when it releases data, according to The Wall Street Journal.
The jobs numbers themselves will matter, and so will the president's reaction.
Digital currency advocates had plenty to crow about last week when bitcoin's price overtook gold.
The event signaled a potentially important moment point for bitcoin, which is generally seen as asset that stores wealth. Bitcoin has gained more than 60 percent in price since mid-January.
Now comes a chance for bitcoin to take another step toward legitimacy.
At some point this week, the Securities and Exchange Commission is likely to rule on a request from Tyler and Cameron Winklevoss — the twin brothers who battled Mark Zuckerberg in court shortly after he founded Facebook — to bring a bitcoin exchange-trade fund to market. If the ETF is approved, it will give investors another vehicle to capitalize on the bitcoin craze without having to go to the exchanges where the currency is traded.
While a bitcoin ETF would be huge for the currency, market experts remain skeptical that it will happen.
Fourth-quarter earnings season has pretty much run its course, with about 98 percent of companies reporting and 65 percent beating bottom-line estimates. Profit growth for the quarter is around 5 percent. A smattering of companies report this week but none that will be big market movers.
The economic calendar looks like this:
Monday: Durable goods
Wednesday: The ADP count on private company payroll growth; productivity, wholesale trade.
Thursday: Challenger jobs report on projected layoffs; weekly jobless claims
Friday: Jobs Friday