Key inflation data in the week ahead will offer clues to future Fed rate moves and the market's path

Published Sat, Feb 11 202310:58 AM EST

As this earnings season begins to wind down, Wall Street this week turns its focus to a key measure of retail inflation, which we hope will show a further slowdown in gains. The stock market, after a strong start in 2023, has been particularly sensitive again to increases in bond yields on concerns the Federal Reserve may not be able to pull back on tightening to fight elevated price pressures as soon as hoped. Looking forward The January consumer price index (CPI) , which calculates the average change over time in prices that shoppers pay for goods and services, is slated for Tuesday. We are looking for smaller price increases — but not too much — to show the Fed's interest rate-raising efforts to beat inflation is working. Economists and investors will use the number to gauge the odds of a soft landing or hard landing for the economy. The CPI advance year-over-year in December of 6.5% marked the smallest 12-month increase since October 2021. That was down from a 7.1% gain in November. The producer price index (PPI) for January, which calculates the change in selling prices received by producers of goods and services, is out on Thursday. The PPI doesn't influence the Fed's decisions as much as the CPI. But PPI readings can predict the direction of future consumer price readings because they show whether producers need to pass higher costs along to shoppers. Squeezed in the middle on Wednesday, January numbers on retail sales are out. A month-over-month gain of 1.5% is expected after a 1.1% decline in December. In addition to the economic data, the market will work its way through the rest of the quarterly earnings reports from Corporate America. The results so far have come in better than expected. Out of the more than two-thirds of the S & P 500 companies that have reported, 69% had positive earnings surprises and 63% had positive revenue surprises. In the Club, quarterly results from Devon Energy (DVN) are released after the closing bell Tuesday but the post-earnings conference call won't be until the next morning. Dow stock Cisco Systems (CSCO) reports after the bell Wednesday and holds its conference call shortly thereafter. As always, our focus is to look beyond the headline numbers to the forward guidance, as well as any relevant commentary from management on the calls. The CPI number may provide more quantitative data than management commentary, but it's backward-looking and heavily skewed by housing data as we wrote about a month ago. Management commentary is in real-time and forward-looking. Here are some other earnings reports and economic numbers to watch in the week ahead: Monday, Feb. 13 Before the bell: TreeHouse Foods (THS), Teradata (TDC), Monday.com (MNDY), Dingdong (DDL), Check Point Software (CHKP) After the bell: Amkor Tech (AMKR), Arch Capital (ACGL), Arista Networks (ANET), Avis Budget (AVIS), Denny's (DENN), Eversource Energy (ES), FirstEnergy (FE), IAC (IAC), Palantir (PLTR), SolarEdge Tech (SEDG) Tuesday, Feb. 14 Before the bell: Coca-Cola (KO), Cleveland Cliffs (CLF), Exelon (EXC), Garret Motion (GTX), GlobalFoundries (GFS), Leidos Holdings (LDOS), Marriott International (MAR), Materialise (MTLS), PerkinElmer (PKI), Peabody Energy (BTU), WESCO (WCC), Zoetis (ZTS), Cae (CAE) After the bell: AirBnB (ABNB), Akamai (AKAM), AMMO (POWW), Andersons (ANDE), Conduent (CNDT), GoDaddy (GDDY), GXO Logistics (GXO), Herbalife (HLF), Nu Holdings (NU), Suncor Energy (SU), Ternium (TX) 8:30 a.m. ET: Consumer Price Index Wednesday, Feb. 15 Before the bell: Analog Devices (ADI), Barrick Gold (GOLD), Biogen (BIIB), Cellebrite (CLBT), Fidelity National (FIS), Generac (GNRC), Kraft Heinz (KHC), Krispy Kreme (DNUT), Lithia & Driveway (LAD), Martin Marietta (MLM), Owens Corning (OC), Ryder Systems (R), Sonic Auto (SAH), Sunoco (SUN), Trade Desk (TTD), Wabtec (WAB) After the bell: Albemarle (ALB), Ameren (AEE), American International Group (AIG), American Water Works (AWK), Boston Beer (SAM), Bowlero (BOWL), CF Industries (CF), Community Health (CYH), Energy Transfer (ET), EQT Corp (EQT), Equinix (EQIX), Invitation Homes (INVH), Marathon Oil (MRO), Nutrien (NTR), Resideo Tech (REZI), RingCentral (RNG), Roku (ROKU), Seagen (SGEN), Shopify (SHOP), Twilio (TWLO), Upwork (UPWK), Zillow (Z) 8:30 a.m. ET: Retail Sales 9:15 a.m. ET: Industrial Production & Capacity Utilization Thursday, Feb. 16 Before the bell: Bloomin' Brands (BLMN), Cenovus (CVE), Constellation Energy (CEG), Crocs (CROX), Datadog (DDOG), Entergy (ETR), EPAM Systems (EPAM), Hasbro (HAS), Henry Schein (HSIC), Hyatt Hotels (H), KBR (KBR), Kelly Services (KLYA), Lab Corp (LH), Nestle (NSRGY), Paramount (PARA), PBF Energy (PBF), Pool Corp (POOL), Sage Therapeutics (SAGE), Shake Shack (SHAK), Toast (TOST), Tower Semi (TSEM), Vulcan Materials (VMC), Watsco (WSO), Zevra Tech (ZBRA) After the bell: Agnico-Eagle (AEM), Applied Materials (AMAT), Consolidated Energy (ED), Digital Realty (DLR), DoorDash (DASH), DraftKings (DKNG), Dropbox (DBX), Redfin Corp (RDFN), Texas Roadhouse (TXRH), Vale (VALE) 8:30 a.m. ET: Initial Claims 8:30 a.m. ET: Housing Starts & Building Permits 8:30 a.m. ET: Producer Price Index Friday, Feb. 17 Before the bell: AutoNation (AN), CenterPoint Energy (CNP), Deere & Co (DE) Looking back Despite a slight gain on Friday, the Dow Jones Industrial Average ended the week down 0.17%. The S & P 500 lost 1.11%, and the Nasdaq lost 2.41% in their worst weeks in 2023. However, all three stock benchmarks are still positive so far this year, with the Nasdaq's nearly 12% year-to-date advance by far leading the way. The tech-heavy did suffer most in last year's terrible market. It was a very light week on the economic front, with just the initial jobless claims on Thursday coming in at 196,000 for the week ended Feb. 4, an increase of 13,000 from the prior week and above the 190,000 expected. Under the hood, energy was the only sector to finish higher for the week, with communication services leading to the downside followed by consumer discretionary and real estate. The U.S. dollar index is hovering just above the 103 level. Gold is trading at just under $1,900 per ounce. WTI Crude prices are hovering just under $80 per barrel, while the yield on the 10-year Treasury stands at around 3.75%. Within the portfolio, we received solid quarter results from industrial gas and engineering giant Linde (LIN); a disappointing quarter from automation firm Emerson Electric (EMR), and a great quarter from Disney (DIS) as newly returned CEO Bob Iger laid out much-needed plans to overhaul the company. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Consumers have been feeling the pinch from higher food prices as inflation soars.

Nathan Stirk | Getty Images News | Getty Images

As this earnings season begins to wind down, Wall Street this week turns its focus to a key measure of retail inflation, which we hope will show a further slowdown in gains.