Good morning. Good Monday. Good markets. Welcome back to the week ahead on Wall Street and a look at what investors need to know for the next five days.
This week lacks some of the obvious headline grabbers we've seen so far in March, but there's still plenty for investors to contemplate. There's a smattering of economic news on tap, more sharp elbows are likely to be thrown around in Washington, and the market will have to digest all of it as the stock rally continues.
President Donald Trump has released his "skinny budget" to Congress, and pretty much nobody likes what they've seen.
This week will give the White House a chance to sell its budget — and to persuade investors that it's still serious about the critical three prongs of the new agenda, namely tax cuts, regulation rollback and infrastructure spending.
Trump kicks it off Monday with a rally in Louisville, Kentucky, where it's believed he will tout his plan to repeal and replace Obamacare. The full House of Representatives is expected to vote on the Republican plan Thursday.
While this may well have been the week that the Fed started to take a back seat to Congress and the president when it comes to setting the economic tone, that doesn't mean the central bank suddenly becomes unimportant.
The effect of the second interest rate increase in the past three months will be watched closely.
A handful of Fed speakers will help investors get a firmer hand on what happens next.
On tap are Fed presidents William Dudley of New York and Charles Evans of Chicago on Monday, Kansas City's Esther George and Cleveland's Loretta Mester on Tuesday, Minnesota's Neel Kashkari on Thursday, and Dallas' Robert Kaplan and Jim Bullard of St. Louis on Friday. Dudley, Evans, Kashkari, Kaplan and Bullard are voters on the policymaking Federal Open Market Committee. Fed Chair Janet Yellen also will be speaking Thursday at the Community Development Research Conference in Washington, though the speech is not expected to address policy.
Though the fourth-quarter earnings season is only just wrapping up, and reports on first-quarter profits are still a few weeks away, there are still a few things to keep in mind when it comes to corporate results.
First of all, FedEx will report Tuesday after the closing bell. The reason that's important is the courier is considered a strong bellwether of overall economic activity — a busy economy does lots of shipping. A strong report from FedEx would reinforce optimism that growth is accelerating.
The second thing is that quarterly profits are expected to grow nearly 9 percent, according to FactSet. However, corporate executives have been fairly pessimistic so far, with 78 issuing negative guidance warnings, and just 30 giving positive notice.
That's resulted in overall expectations to dim from a 12.3 percent earnings growth expected as of Dec. 31 for the first quarter.
Bottom line: Keep a lookout for what corporate officers are saying about what's ahead.
As we get further into March things start to slow down.
The FedEx earnings should be a big event, but that's it for major profit reports.
On the economy, numbers on housing will be key. Existing home sales data comes out Wednesday, while new home sales results will be released Thursday.
The biggest data point for the week comes Friday with durable goods orders, which measure demand for things like appliances and other long-lasting items.
Though limited, the economic schedule will have plenty to say about where things stand.