Setting the Tone
The year may have gotten off to a sleepy start, but things are set to heat up this week with the beginning of earnings season and inflation data.
Big banks and other major financial institutions will kick things off as usual, providing investors with the first glimpse into how corporate America fared at the end of 2024. But beyond the individual results, these financial heavyweights often set the tone for the entire earnings season and offer valuable insights into consumer health, lending activity, and the overall state of the economy.
The all-important Consumer Price Index (CPI) data is scheduled to be released the same morning as the banks start reporting. Recent readings haven’t been as comforting as they were a year ago, with almost all Federal Reserve officials believing that inflation risks had increased. If inflation were to come in hot, it could push out the timing of additional interest rate cuts.
Needless to say, this week will keep investors on their toes: While strong earnings could signal robust corporate health, it could also suggest that inflationary pressures remain elevated due to company pricing power. Conversely, any signs of margin pressure could indicate that companies are struggling to pass on costs to consumers – a potentially encouraging sign for the path of inflation.
Economic and Earnings Calendar
Monday
• December New York Fed Survey of Consumer Expectations: This is a measure of peoples’ expectations for inflation, jobs prospects, earnings growth, and more.
Tuesday
• December NFIB Small Business Optimism: This measures how small business owners feel about current and future economic conditions.
• December Producer Price Index: The PPI tracks price trends that producers face and is down significantly from its peak earlier in the cycle.
• Fedspeak: Kansas City Fed President Jeff Schmid will discuss monetary policy and the economic outlook with the advocacy group Central Exchange. New York Fed President John Williams will give opening remarks at a New York Fed event on housing affordability.
Wednesday
• January Empire State Manufacturing Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• December Consumer Price Index: The CPI is one of the most popular indicators for tracking consumer price trends and is a marquee release for market watchers.
• Fedspeak: Richmond Fed President Tom Barkin will deliver a keynote address at an event on the Maryland economy. New York Fed President John Williams will give a keynote address at the CBIA Economic Summit and Outlook 2025. Chicago Fed President Austan Goolsbee will speak at the Midwest Economic Forecast Forum.
• Earnings: Bank of New York Mellon, BlackRock, Citigroup, Goldman Sachs Group, JPMorgan Chase, Wells Fargo
Thursday
• December Retail Sales: This measures spending at retail stores and is a key indicator of consumer demand.
• December Import/Export Price Indexes: These indexes track the changes in the prices of nonmilitary goods and services traded between the U.S. and the rest of the world.
• January Philadelphia Fed Manufacturing Activity: The Philadelphia Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• January New York Services Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• January NAHB Housing Market Index: This index tracks how homebuilders feel about the current and future state of the single-family housing market.
• Fedspeak: Philadelphia Fed President Patrick Harker will discuss the economic outlook. Richmond Fed President Barkin will speak to the Virginia Bankers Association and the Virginia Chamber of Commerce about the economy. Kansas City Fed President Jeff Schmid will speak to the Economic Club of Kansas City.
• Earnings: Bank of America, JB Hunt Transport Services, Morgan Stanley, M&T Bank, PNC Financial Services Group, UnitedHealth Group, US Bancorp
Friday
• December Building Permits and Housing Starts: Construction data is a leading indicator of economic activity.
• December Industrial Production and Capacity Utilization: The industrial sector accounts for much of the cyclical swings in economic activity.
• Earnings: Citizens Financial Group, Fastenal, Huntington Bancshares, Kinder Morgan, Regions Financial, Schlumberger, State Street, Truist Financial
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