3 Things on Economic Focus for Week 03/12 thru 03/16/2018

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Ahead of the coming week, Team Day Trader has compiled a list of 3 major events on the economic calendar in which we believe are most likely to affect the market this week. Financial market participants should focus on U.S. Inflation Data to give continued guidance of how it’ll impact the Federal Reserve’s view on monetary policy in the future. There’s also Retail Sales Data for February, which should provide further clues about the strength of the economy ahead of the March 20-21 FOMC meeting.

Meanwhile, this week also features U.S. data on producer prices, building permits, housing starts, industrial production, weekly jobless claims, Michigan consumer sentiment, as well as surveys on manufacturing conditions in the Philadelphia & New York regions.

1. U.S. Inflation Data

The Commerce Department will publish February inflation figures at 8:30 am EST on Tuesday. Market analysts expect consumer prices to rise 0.2%, weakening from January’s 0.5% increase, while core inflation is forecast to inch up 0.2%, a touch slower than a month earlier, when core CPI recorded a 0.3% gain. On a yearly base, core CPI is projected to climb 1.8%, unchanged from the preceding month.

Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less. Rising inflation would be a catalyst to push the Fed toward raising interest rates at a faster pace than currently expected, which at this point is 3 times this year.

Data released Friday showed that U.S. job growth surged in February, recording its biggest increase in more than 1 1/2 years, but a slowdown in wage gains pointed to only a gradual increase in inflation. That could help drive away any views that the Fed will be forced to tighten policy at a quicker pace than expected this year.

2. U.S. Retail Sales

The Commerce Department will publish data on retail sales for February at 8:30 am EST on Wednesday. The consensus forecast shows retail sales rose 0.3% last month, snapping back after a decline of 0.3% in January. Core sales are forecast to inch up 0.3%, after holding flat a month earlier.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy. Consumer spending accounts for as much as 70% of U.S. economic growth.

3. Washington D.C.

News out of Washington D.C. is expected to keep investors on their toes, after President Donald Trump imposed tariffs on aluminum & steel late last week. U.S. President Donald Trump set import tariffs on Thursday of 25% on steel & 10% on aluminum, but is under heavy pressure from allies including the European Union & Japan to dilute the measures.

Trump believes the tariffs will safeguard American jobs, though many economists say the impact of price increases for users of steel & aluminum, such as the auto & oil industries, will destroy more jobs than curbs on imports create.

Moving on to North Korea talks, Trump made the shocking decision on Thursday to meet with Kim after the North Korean leader’s invitation was relayed by a South Korean delegation who visited the White House. The move abruptly reversed decades of U.S. policy aimed at preventing North Korea from developing nuclear weapons & ballistic missiles.

U.S. President Trump said on Saturday his planned meeting with North Korean leader Kim Jong Un could fizzle without an agreement or it could result in “the greatest deal for the world” to ease nuclear tensions between the two countries.

Hopefully helpful & stay up-to-date on all of this week’s action by visiting Team Day Trader’s blog Tuesday’s thru Friday’s, & on Sunday’s.

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