Week Ahead: Fed to make important forecasts as stocks on ‘precipice’ of breaking out

Thursday’s regional Philadelphia Fed survey and PMI data Friday on manufacturing and the services sectors will be important. Stocks surged in the past week with the best performance since November for the S&P 500, which ended up 2.9 percent. He said it should be positive for stocks if the Fed reduces its forecast for rate hikes and delivers on expectations. “The only down week of the year was the week before this, and the trend has been higher,” he said. The Fed interest rate forecasts appear as


Thursday’s regional Philadelphia Fed survey and PMI data Friday on manufacturing and the services sectors will be important. Stocks surged in the past week with the best performance since November for the S&P 500, which ended up 2.9 percent. He said it should be positive for stocks if the Fed reduces its forecast for rate hikes and delivers on expectations. “The only down week of the year was the week before this, and the trend has been higher,” he said. The Fed interest rate forecasts appear as
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Company: cnbc, Activity: cnbc, Date: 2019-03-15  Authors: patti domm, al drago, bloomberg, getty images
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Week Ahead: Fed to make important forecasts as stocks on 'precipice' of breaking out

The Fed’s meeting is the big deal for markets in the coming week, and it is widely expected to send a message that investors in both bonds and stocks could find bullish.

But analysts in both markets say the Fed’s message has been well telegraphed, and market response could be tepid or even a “sell the news” reaction.

The key for both markets will be what the economic data shows, after a series of weak reports. Thursday’s regional Philadelphia Fed survey and PMI data Friday on manufacturing and the services sectors will be important. Existing home sales are also released Thursday.

“The first quarter has not exactly been a hallelujah quarter, and the Fed has to acknowledge that,” said Diane Swonk, chief economist at Grant Thornton.

The Fed is expected to hold interest rates steady, but it is also expected to issue a new forecast with fewer rate hikes and a slower economy. The Fed also is likely to announce the end of its operation to unwind its balance sheet, but economists are divided on which month this year it will actually end the program.

Stocks surged in the past week with the best performance since November for the S&P 500, which ended up 2.9 percent. At the same time Treasury yields, which move opposite price, continued to fall. The bench mark 10-year Treasury slipped below 2.60 percent Friday, its lowest yield since June 4, and the 2-year was at 2.43 percent.

The fact that both markets are rising at the same time is somewhat unusual, and at some point the trend could break in favor of one market versus the other.

An easier Federal Reserve, meaning one less inclined to drive up rates, is viewed as a positive for stocks because higher interest rates can slow the economy and send borrowing costs higher for companies and investors. Bond yields also head lower when the Fed is not likely to raise interest rates.

“This could be an interesting week,” said Art Hogan, chief market strategist at National Securities. He said it should be positive for stocks if the Fed reduces its forecast for rate hikes and delivers on expectations.

“This is the meeting where we get more clarity on the balance sheet reduction. Both those things would be an affirmation of where things are right now. It’s also technical…where we close [on the S&P] puts us on a precipice of breaking out,” said Hogan.

The S&P 500 closed at 2,822, near the key 2,825 level which is the upper end of a big band of resistance. “The only down week of the year was the week before this, and the trend has been higher,” he said.

But Paul Christopher, Wells Fargo Investment Institute chief international investment strategist, said the stock market could actually have little reaction to the Fed because Fed officials have been very dovish in public comments.

“It could be neutral or perhaps even negative. What more can they say? You might see some people selling the fact,” he said. Christopher said he sees the market as stretched, and it could sell off. But then, there could be a buying opportunity.

“We think stocks have to start to feel better about the economy first,” he said, adding a trade deal with China could be a positive.

The Fed’s actions could also already be priced into the bond market, according to George Goncalves, head of fixed income strategy at Nomura. He said what really matters is what risk markets, or stocks, do in response.

“There’s scope for risk to do better and the Fed’s not hiking. You can see it rally into the summer and the economy will look better and if that happens that will be a buying opportunity for rates,” he said.

Economists see the Fed reducing its forecast for two rate hikes to one or even none for this year. They also expect it to say it will end its program to reduce the balance sheet, but they don’t agree on whether that happens in June, September or closer to the end of the year.

The Fed is currently reducing its balance sheet by allowing securities to roll down as they mature, instead of replacing all of them as it previously did. It now theoretically could allow $60 billion a month to roll off, but Fed officials could change that program and begin to repurchase securities to replace them.

The markets are also waiting to hear if the Fed will focus solely on Treasury securities, and at what part of the curve – or duration. In the past it had purchased mortgages but is expected to discontinue that.

“We think they’re back to buying Treasurys by Oct. 1. Somethings got to give. At some point, its either that [bond market] people are too pessimistic and the economy is going to do well because the Fed is behind the curve, or we have another kind of correction on our hands in the next six to nine months,” he said. “We just have to pass through time There’s a powerful faith-based system around easy money can fix all things.”

Swonk said she expects the Fed to continue to forecast one rate hike for this year. The Fed interest rate forecasts appear as anonymous dots from individual Fed officials on a chart, known as the “dot plot.”

Even so, she doesn’t expect the Fed will actually raise rates but it will continue to give itself flexibility. Economic data has been mixed with some very poor reports, like December’s retail sales, which fell 1.6 percent, and February’s jobs report, which showed job growth of just 20,000 jobs, 160,000 below forecast.

“I think they have to walk a fine line between acknowledging the weakness we’ve seen and then also show that we’re still going to see growth this year,” she said.


Company: cnbc, Activity: cnbc, Date: 2019-03-15  Authors: patti domm, al drago, bloomberg, getty images
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Week Ahead: After mysterious lack of new jobs, slew of US data will be a big deal

I think we look back over the past few months and we had that very disappointing December retail sales number. The other significant market factor in the week ahead could be any developments on U.S.-China trade negotiations. The weakening trend in the first quarter, while expected, is hard to get a handle on, and while it’s expected to be temporary, every negative report increases doubts. First out of the gate Monday will be retail sales, which fell 1.2 percent in December. January’s headline nu


I think we look back over the past few months and we had that very disappointing December retail sales number. The other significant market factor in the week ahead could be any developments on U.S.-China trade negotiations. The weakening trend in the first quarter, while expected, is hard to get a handle on, and while it’s expected to be temporary, every negative report increases doubts. First out of the gate Monday will be retail sales, which fell 1.2 percent in December. January’s headline nu
Week Ahead: After mysterious lack of new jobs, slew of US data will be a big deal Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-08  Authors: patti domm, kamil krzaczynski, timothy aeppel
Keywords: news, cnbc, companies, retail, big, quality, report, data, negative, number, week, mysterious, shutdown, lack, deal, expected, economists, slew, sales, ahead, jobs


Week Ahead: After mysterious lack of new jobs, slew of US data will be a big deal

Why this expert says the February jobs miss is just a blip 17 Hours Ago | 02:08

But economists, while doubting the report, also said they are paying close attention to incoming data for signs the report is either an outlier or the beginning of a broader more negative trend.

“You go from 310,000 jobs to 20,000. That doesn’t seem logical,” said Ed Keon, chief investment strategist at QMA. ” I think we look back over the past few months and we had that very disappointing December retail sales number. That seemed a bit of a fluke…But we’re quants. You can’t just toss out the data that doesn’t agree with your existing view.”

The other significant market factor in the week ahead could be any developments on U.S.-China trade negotiations.

But the overriding issue is whether the global economy is slowing, particularly as China’s data continues to look weak.

Not all was negative in the U.S. February employment report. Economists said wage growth of 3.4 percent year over year and a lower 3.8 percent unemployment rate were encouraging, as were other data. The report also followed an unusually strong January number of 311,000, after revisions.

The 35-day government shutdown delayed many reports and may have affected the quality of others, economists said. The weakening trend in the first quarter, while expected, is hard to get a handle on, and while it’s expected to be temporary, every negative report increases doubts.

“Anybody who is mentioning the word ‘recession’ is wrong. The economy invariably slows in Q1. What we don’t know is it more than usual, and the poor quality and volatility in the data since the government shutdown has made it impossible to assess,” said Ward McCarthy, chief financial economist at Jefferies.

First out of the gate Monday will be retail sales, which fell 1.2 percent in December. January’s headline number is expected to fall by 0.1 percent but excluding autos and gasoline, sales are expected to rise by 0.7 percent, according to Refinitiv.


Company: cnbc, Activity: cnbc, Date: 2019-03-08  Authors: patti domm, kamil krzaczynski, timothy aeppel
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February’s jobs report should show whether there’s anything to really fear about economy

The economy was expected to have added 180,000 jobs in February, and unemployment is expected to drop by a tenth to 3.9 percent. That is well below the 304,000 jobs added in January, but economists still expect a solid report. “Jobs growth is the single best indicator of how the economy is doing. “The view is that job growth should slow because economic activity is starting to slow. Goldman Sachs economists are less optimistic about February’s job growth, and expect only 150,000 jobs, the slowes


The economy was expected to have added 180,000 jobs in February, and unemployment is expected to drop by a tenth to 3.9 percent. That is well below the 304,000 jobs added in January, but economists still expect a solid report. “Jobs growth is the single best indicator of how the economy is doing. “The view is that job growth should slow because economic activity is starting to slow. Goldman Sachs economists are less optimistic about February’s job growth, and expect only 150,000 jobs, the slowes
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Company: cnbc, Activity: cnbc, Date: 2019-03-07  Authors: patti domm, timothy aeppel
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February's jobs report should show whether there's anything to really fear about economy

February’s employment report is expected to show strong job and wage growth, and could signal that the economy’s slower growth in the first quarter is just a speed bump rather than a sign of trouble.

The economy was expected to have added 180,000 jobs in February, and unemployment is expected to drop by a tenth to 3.9 percent. That is well below the 304,000 jobs added in January, but economists still expect a solid report. Wage growth is expected to strengthen, rising 0.3 percent, up from January’s 0.1 percent.

“Jobs growth is the single best indicator of how the economy is doing. It shows both how many people are being added to payrolls. It tells you much people are being paid, and also any job that is added is a sign of strength of a company’s order book and their prospects going forward,” said Luke Tilley, chief economist at Wilmington Trust. He expects to see 200,000 jobs were added.

The first quarter appears to be much slower than the fourth quarter, but economists are still frustrated by the lack of data, which was delayed by the government shutdown. For instance, January’s retail sales will be released on Monday, much later than normal. That number is particularly important after the sharp surprising drop in December retail sales.

“We expect 200,000 [jobs], a little stronger than consensus,” said Michael Gapen, chief U.S. economist at Barclays. “The view is that job growth should slow because economic activity is starting to slow. We don’t think 750,000 jobs over the last three months of the year is the trend. We do think things will slow down to 175,000 in the coming months. We’re thinking growth slows from the 2.5 that we saw in the fourth quarter to about 2 percent at the end of the year.”

Many economists see growth of less than 2 percent in the first quarter but a bounce back in the second quarter as the economy shakes off the effects of the 35-day government shutdown and bad winter weather. The economy could also move beyond the drag from trade issues later in the year if there is a trade agreement between the U.S. and China and an end to tariffs.

“Within the labor market, the biggest story is firms are looking to hire, and they’re really just restricted by the low unemployment rate and being able to find people…With that dynamic, we still think the labor market looks strong. They’re going to hire everyone they can,” said Tilley.

Goldman Sachs economists are less optimistic about February’s job growth, and expect only 150,000 jobs, the slowest pace in five months. “We believe the trend in job growth has likely slowed from the 232k average pace of the last six months, and we also expect a drag of at least 40k from above-average snowfall during the February survey week,” they wrote in a note.

The Goldman economists said February seasonal factors have also become a negative, possibly because of unusually mild weather in recent years. “If so, this would also restrain payroll growth in tomorrow’s report,” they added.

Tilley said he is watching to see if jobs were added in technology, and would expect them to be particularly in software and cloud computing. He noted that the fourth quarter GDP report showed a jump in spending in intellectual property and software by companies, with IP the strongest since the 1990s.

Source: Wilmington Trust


Company: cnbc, Activity: cnbc, Date: 2019-03-07  Authors: patti domm, timothy aeppel
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These seven stocks have done the worst in the 10-year bull market

When stocks hit bottom just before the start of the bull market 10 years ago, Wall Street was littered with financial crisis losers, many trading in the single digits. Several of them are in the energy sector, the industry group that has had the lowest price appreciation since the S&P’s low close on March 9, 2009. GE, AT&T and Campbell Soup, all household names, also made the list of the bottom 25 performers. Some stocks in the bottom 25 have seen double digit moves off the bottom, but the stock


When stocks hit bottom just before the start of the bull market 10 years ago, Wall Street was littered with financial crisis losers, many trading in the single digits. Several of them are in the energy sector, the industry group that has had the lowest price appreciation since the S&P’s low close on March 9, 2009. GE, AT&T and Campbell Soup, all household names, also made the list of the bottom 25 performers. Some stocks in the bottom 25 have seen double digit moves off the bottom, but the stock
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Company: cnbc, Activity: cnbc, Date: 2019-03-06  Authors: patti domm, gina francolla, michael nagle, bloomberg, getty images
Keywords: news, cnbc, companies, sp, sector, seven, stocks, 10year, energy, close, price, list, soup, 25, bull, 2009, worst, market


These seven stocks have done the worst in the 10-year bull market

When stocks hit bottom just before the start of the bull market 10 years ago, Wall Street was littered with financial crisis losers, many trading in the single digits.

CNBC looked at the price performance of S&P 500 members that have been publicly traded since the dark days of the financial crisis and found a short list of stocks that have actually declined in price since March 2009. Several of them are in the energy sector, the industry group that has had the lowest price appreciation since the S&P’s low close on March 9, 2009.

The stock that lagged the most from then to now is internet provider CenturyLink, down 49 percent, followed by energy company Apache, down 34 percent, mining company Mosaic, down nearly 26 percent, and Devon Energy, down 25 percent. All prices were as of Tuesday’s close.

GE, AT&T and Campbell Soup, all household names, also made the list of the bottom 25 performers. AT&T is up 38 percent from its $29.75 close on March 9, 2009. General Electric is up 39 percent, and Campbell Soup is up 41 percent.

Some stocks in the bottom 25 have seen double digit moves off the bottom, but the stocks that top the winners’ list have had huge gains, like Ulta, up 7,160 percent, or Netflix, up 6,632 percent.

The S&P 500 had hit an intraday bottom of 666, on March 6, 2009, but its low close was 676 a few days later on March 9.

Since that March 9 close, the S&P energy sector has gained 56 percent, while stocks in the top performing sector, consumer discretionary, rose 598 percent. Technology also snapped back strongly, with a gain of 522 percent and financials rose 422 percent.

Based on closing prices March 5, 2019

Correction: This story was revised to delete an incorrect reference in a summary that Nobel Energy was among the stocks that have lost ground in the past decade and to correct that Apache is down 34 percent in that time span.

— CNBC’s Fred Imbert contributed to this story.


Company: cnbc, Activity: cnbc, Date: 2019-03-06  Authors: patti domm, gina francolla, michael nagle, bloomberg, getty images
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These stocks are thousands of times higher than they traded when the market hit its crisis-era low

Since the market bottomed during the financial crisis, the S&P 500 has gained more than 312 percent, but some individual stocks have gained thousands of times over. The S&P 500 cratered on March 6, 2009, when it reached an intraday low of 666. CNBC studied the price performance of stocks in the S&P that were publicly traded 10 years ago. Amazon has gained 2,700 percent from that 2009 low. WATCH: If You Invested In Apple And Amazon In 2009 Here’s What You’d Have Now


Since the market bottomed during the financial crisis, the S&P 500 has gained more than 312 percent, but some individual stocks have gained thousands of times over. The S&P 500 cratered on March 6, 2009, when it reached an intraday low of 666. CNBC studied the price performance of stocks in the S&P that were publicly traded 10 years ago. Amazon has gained 2,700 percent from that 2009 low. WATCH: If You Invested In Apple And Amazon In 2009 Here’s What You’d Have Now
These stocks are thousands of times higher than they traded when the market hit its crisis-era low Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-06  Authors: patti domm, gina francolla, carlo allegri
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These stocks are thousands of times higher than they traded when the market hit its crisis-era low

Since the market bottomed during the financial crisis, the S&P 500 has gained more than 312 percent, but some individual stocks have gained thousands of times over.

The S&P 500 cratered on March 6, 2009, when it reached an intraday low of 666. Its closing low came three days later, on March 9, at 676.

CNBC studied the price performance of stocks in the S&P that were publicly traded 10 years ago. In a list of the top 25, the top-performing stock was Ulta Beauty, which is up more than 7,100 percent since then. It is followed by Abiomed and Netflix, both up more than 6,000 percent. Amazon has gained 2,700 percent from that 2009 low. All prices are as of Tuesday’s close.

WATCH: If You Invested In Apple And Amazon In 2009 Here’s What You’d Have Now


Company: cnbc, Activity: cnbc, Date: 2019-03-06  Authors: patti domm, gina francolla, carlo allegri
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China trade deal looking more and more like a ‘sell the news’ opportunity for stock investors

“As such, a China deal is the most important ‘stimulus’ Trump could provide in 2019,” he wrote. U.S. Trade Representative Robert Lighthizer last week said the provisions to protect intellectual property are a big part of the working document. Bianco said even if the deal does come up short in some investors’ minds, it would be a positive. It’s about trade being a policy tool to get China to the negotiating table, on the topics of trade and many other things,” he said. Bianco said trade is an ope


“As such, a China deal is the most important ‘stimulus’ Trump could provide in 2019,” he wrote. U.S. Trade Representative Robert Lighthizer last week said the provisions to protect intellectual property are a big part of the working document. Bianco said even if the deal does come up short in some investors’ minds, it would be a positive. It’s about trade being a policy tool to get China to the negotiating table, on the topics of trade and many other things,” he said. Bianco said trade is an ope
China trade deal looking more and more like a ‘sell the news’ opportunity for stock investors Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-04  Authors: patti domm, fred dufour, afp, getty images, jim watson
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China trade deal looking more and more like a 'sell the news' opportunity for stock investors

If tariffs are retained, some strategists say that would be a negative for the market since uncertainty would remain, and so would the impact on businesses.

“Removing the uncertainty of escalating tariffs should be enough to stimulate capex, but a cut to existing tariffs should provide a significant boost to US capex,” Clifton notes.

“As such, a China deal is the most important ‘stimulus’ Trump could provide in 2019,” he wrote.

U.S. Trade Representative Robert Lighthizer last week said the provisions to protect intellectual property are a big part of the working document. The plan is that bilateral meetings would take place on any disputes, and if the talks don’t resolve them, the U.S. could impose tariffs.

“By the time you get through all these meetings and Chinese denials, you already did harm to America’s businesses and workers. This is the U.S. going back to the Obama and Bush era,” said Derek Scissors, resident scholar at American Enterprise Institute.”We’re in a situation where we’re not enforcing our law now, and we’re setting up a mechanism which is very similar to past mechanisms where we failed to enforce our laws.”

Bianco said even if the deal does come up short in some investors’ minds, it would be a positive. He said he expects the S&P to reach 2,950 by year end, and if there was a strong deal with China, removing all tariffs, it could move to 3,000.

But he expects a deal that could retain some tariffs.

“It’s not just about trade. It’s about trade being a policy tool to get China to the negotiating table, on the topics of trade and many other things,” he said. Bianco said trade is an opening to other important issues, like the South China Sea.

“They’ve taken a lot of risks with the economy to make incremental gains, but this is going in the right direction. Overall it’s a pretty good outcome,” Bianco said.


Company: cnbc, Activity: cnbc, Date: 2019-03-04  Authors: patti domm, fred dufour, afp, getty images, jim watson
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Atlanta Fed’s closely watched GDP tracker shows next to no growth for first quarter

The Atlanta Fed’s GDPNow initial model estimate shows negligible growth for the first quarter of just 0.3 percent. The first-quarter report, which was released on the Atlanta Fed’s website, sent stocks lower Friday morning, but they later recovered. Many Wall Street economists see growth below 2 percent for the quarter, but for the most part they remain above 1 percent. Goldman Sachs cut its estimate of first-quarter growth to 0.9 percent Friday, and Macroeconomic Advisors reduced its call to 1


The Atlanta Fed’s GDPNow initial model estimate shows negligible growth for the first quarter of just 0.3 percent. The first-quarter report, which was released on the Atlanta Fed’s website, sent stocks lower Friday morning, but they later recovered. Many Wall Street economists see growth below 2 percent for the quarter, but for the most part they remain above 1 percent. Goldman Sachs cut its estimate of first-quarter growth to 0.9 percent Friday, and Macroeconomic Advisors reduced its call to 1
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Company: cnbc, Activity: cnbc, Date: 2019-03-01  Authors: patti domm, brendan mcdermid
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Atlanta Fed's closely watched GDP tracker shows next to no growth for first quarter

The Atlanta Fed’s GDPNow initial model estimate shows negligible growth for the first quarter of just 0.3 percent.

The Atlanta Fed noted Friday that the 2.6 percent estimate on Thursday of fourth-quarter real GDP growth was slightly above the forecast it released earlier in the week.

The first-quarter report, which was released on the Atlanta Fed’s website, sent stocks lower Friday morning, but they later recovered.

Many Wall Street economists see growth below 2 percent for the quarter, but for the most part they remain above 1 percent. Goldman Sachs cut its estimate of first-quarter growth to 0.9 percent Friday, and Macroeconomic Advisors reduced its call to 1 percent from 1.1 percent.

Economists mostly expect a snap back in the second quarter. The Goldman Sachs economists also raised their expectations for second-quarter growth to 2.9 percent from 2.7 percent. They said their first-quarter forecast includes an expected drag from inventories, sequentially slower consumption growth, a drop in residential investment, and 0.4 percentage points drag from the government shutdown.

Friday’s data included personal consumption expenditures, ISM manufacturing and consumer sentiment, all of which came in below forecast. The spending stats included December’s data that had been delayed due to the government shutdown.

Many economists expect the weakness in the first quarter to be transitory, with the consumer and businesses affected by the shutdown and severely cold weather brought on by the polar vortex. There are also signs that the trade conflicts have impacted some parts of the economy.


Company: cnbc, Activity: cnbc, Date: 2019-03-01  Authors: patti domm, brendan mcdermid
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The week ahead: Jobs report needs to silence rising worries about the economy

The jobs data tops the list of important economic news in the week ahead, particularly after a string of disappointing reports showing that both consumers and businesses have pulled back. “We think there’s further upside for this bull market to go. “Whatever the concerns, around trade tariffs, or decelerating corporate profits, we believe this bull market remains very healthy.” When economic reports come in below economists’ expectations, the surprise index falls and a low number for the index i


The jobs data tops the list of important economic news in the week ahead, particularly after a string of disappointing reports showing that both consumers and businesses have pulled back. “We think there’s further upside for this bull market to go. “Whatever the concerns, around trade tariffs, or decelerating corporate profits, we believe this bull market remains very healthy.” When economic reports come in below economists’ expectations, the surprise index falls and a low number for the index i
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The week ahead: Jobs report needs to silence rising worries about the economy

Job growth has remained vibrant despite the slow-growing economy, and that’s a trend investors are anxious to see confirmed in the February employment report on Friday.

Even with some economists expecting growth around 1 percent for the first quarter, the labor market has been strong, and economists expect to see 185,000 jobs added in February. The economy is widely expected to bounce back in the second quarter to a pace well above 2 percent, after the temporary headwinds from the government shutdown and polar vortex abate.

The jobs data tops the list of important economic news in the week ahead, particularly after a string of disappointing reports showing that both consumers and businesses have pulled back.

The stock market will pass a major milestone on Wednesday—the tenth anniversary of the day the market bottomed in 2009, when the S&P 500 hit 666. The S&P has gained more than 312 percent since that low of the financial crisis, and some analysts see the bull market continuing for at least another year.

“We think there’s further upside for this bull market to go. The age of the bull does not matter. What really matters is how healthy it is,” said Patrick Palfrey, U.S. equity strategist at Credit Suisse. “Whatever the concerns, around trade tariffs, or decelerating corporate profits, we believe this bull market remains very healthy.”

The S&P 500 is taking aim at the 2,800 level, an important milestone that it has struggled to surpass in the past week. The 2,800 marker was an important level for the stock market four times in past several months, and holding above it could signal the rally could drive stocks to fresh highs.

Palfrey said investors first and foremost are looking at any information that can help them gauge how the economy is doing. “We’re looking for confirmation in the jobs report. We think the economy is doing okay. Labor participation is improving. We’re going to see that continuing to inch back up,” he said.

The Citigroup economic surprise index fell to a new 18-month low Friday, following a recent rash of disappointing reports. When economic reports come in below economists’ expectations, the surprise index falls and a low number for the index is reflecting the economic slowdown.

Source: Citigroup

Goldman Sachs economists Friday said they were expecting first quarter growth of just 0.9 percent, but they raised second quarter growth to 2.9 percent.


Company: cnbc, Activity: cnbc, Date: 2019-03-01  Authors: patti domm, bryan r smith
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Trump got a strong economy in 2018, but first quarter of this year looks weak

The pickup was a surprise after weak durable goods spending data in the quarter. While business expenditures look better, economists say the sharp drop in retail sales in December signals a weaker consumer at the start of the year. The Bureau of Economic Analysis said 2018 growth was 2.9 percent, a calculation derived by averaging growth in each quarter, but Wall Street economists who measure growth on a fourth-quarter-over-fourth-quarter basis say growth was 3.1 percent for 2018, up from 2.5 pe


The pickup was a surprise after weak durable goods spending data in the quarter. While business expenditures look better, economists say the sharp drop in retail sales in December signals a weaker consumer at the start of the year. The Bureau of Economic Analysis said 2018 growth was 2.9 percent, a calculation derived by averaging growth in each quarter, but Wall Street economists who measure growth on a fourth-quarter-over-fourth-quarter basis say growth was 3.1 percent for 2018, up from 2.5 pe
Trump got a strong economy in 2018, but first quarter of this year looks weak Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-28  Authors: patti domm, mandel ngan, afp, getty images
Keywords: news, cnbc, companies, economy, trump, 2018, shutdown, business, weak, looks, spending, growth, say, jump, quarter, pickup, economists, strong


Trump got a strong economy in 2018, but first quarter of this year looks weak

A surprise jump in business spending boosted fourth-quarter growth to 2.6 percent, but economists say the first quarter could expand at half that pace due to the government shutdown and a sluggish consumer.

Fourth-quarter GDP topped the 2.3 percent expected by economists, due in part to a 6.7 percent increase in equipment spending and a 13.1 percent jump in intellectual property, which includes software. The pickup was a surprise after weak durable goods spending data in the quarter.

While business expenditures look better, economists say the sharp drop in retail sales in December signals a weaker consumer at the start of the year. That will make for a tougher comparison, and even before the fourth-quarter report, economists were looking for first-quarter growth below 2 percent with a pickup in the second half.

Consumers at the end of 2018 were facing the stock market’s sharp holiday season decline, the prospect of a government shutdown and rising interest rates. The government remained shutdown for most of January, but consumers are now showing signs of a rebound with an unexpected jump in consumer confidence in February.

“The White House, and fairly so, can claim bragging rights for 2018. The real question is the first quarter. You’re well under 2 percent. Are you under 1 percent? We don’t know yet,” said Joseph LaVorgna, Natixis chief economist for the Americas.

The Bureau of Economic Analysis said 2018 growth was 2.9 percent, a calculation derived by averaging growth in each quarter, but Wall Street economists who measure growth on a fourth-quarter-over-fourth-quarter basis say growth was 3.1 percent for 2018, up from 2.5 percent for 2017.

By either measure, the growth rate was close to the 3 percent the Trump administration promised would be generated by its economic policies. But the first half of 2018 already looks to be well below that pace, even if the second quarter picks back up, as economists expect. The final GDP number for fourth quarter will be released on March 28, and it could be revised in either direction.

The pickup in business spending, therefore, is critical. If it continues, it could dispel some doubts that corporations are not using tax proceeds for investment but for things like stock buybacks and dividends. It also suggests there may have been less delayed spending because of uncertainty surrounding trade.


Company: cnbc, Activity: cnbc, Date: 2019-02-28  Authors: patti domm, mandel ngan, afp, getty images
Keywords: news, cnbc, companies, economy, trump, 2018, shutdown, business, weak, looks, spending, growth, say, jump, quarter, pickup, economists, strong


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A ‘shock and awe’ rally scenario that could rip the market 7% higher

The Trump administration and the Federal Reserve together could spark a “shock and awe” rally in stocks that would take the S&P 500 to the 3,000 level, according to a J.P. Morgan executive director. The S&P 500 closed Wednesday at 2,792, down a point. Bank reserves are a portion of the Fed balance sheet and are currently about $1.6 trillion. Crisafulli said that investors are wondering whether the S&P 500 will have a long pause below 2,800 or break out in another leg higher towards 2,850. “Botto


The Trump administration and the Federal Reserve together could spark a “shock and awe” rally in stocks that would take the S&P 500 to the 3,000 level, according to a J.P. Morgan executive director. The S&P 500 closed Wednesday at 2,792, down a point. Bank reserves are a portion of the Fed balance sheet and are currently about $1.6 trillion. Crisafulli said that investors are wondering whether the S&P 500 will have a long pause below 2,800 or break out in another leg higher towards 2,850. “Botto
A ‘shock and awe’ rally scenario that could rip the market 7% higher Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-27  Authors: patti domm, xinhua news agency, getty images
Keywords: news, cnbc, companies, higher, reserves, trump, sheet, upside, rally, rip, fed, sp, 500, balance, wrote, tariffs, scenario, market, shock, awe


A 'shock and awe' rally scenario that could rip the market 7% higher

The Trump administration and the Federal Reserve together could spark a “shock and awe” rally in stocks that would take the S&P 500 to the 3,000 level, according to a J.P. Morgan executive director.

That would represent a 7 percent gain from where the market was trading Wednesday. The S&P 500 closed Wednesday at 2,792, down a point.

“The ‘shock and awe’ upside scenario involves rescinding all US-China tariffs instantly, causing certain tariff-sensitive firms to raise 2019 guidance, while the Fed commits to keeping reserves at ~$1.3T+. If all this were to come to pass, then the SPX will easily make a run towards 3K,” wrote J.P. Morgan’s executive director Adam Crisafulli, in a note to clients.

Bank reserves are a portion of the Fed balance sheet and are currently about $1.6 trillion. That is the portion of the balance sheet that is is rolling down as part of its normalization process, and traders have been looking for detail on what level the Fed might stop the program.

President Donald Trump has indefinitely held off on new tariffs on Chinese goods that he had threatened for March 1 because trade talks are progressing toward a deal. However, analysts have said if he does not remove existing tariffs, the market will react negatively to any deal since tariffs have been hurting earnings and the economy.

“Fundamentals argue for the former as the three big stock tailwinds (the Fed Pivot, better earnings, and easing China trade tensions) are largely embedded within the SPX at current levels. There are scenarios whereby these issues could still surprise on the upside but the odds of them unfolding don’t seem great,” he wrote.

He noted that Powell said the Fed this week that the Fed could conclude balance sheet normalization at $1 trillion in reserves, plus a buffer.

Crisafulli said that investors are wondering whether the S&P 500 will have a long pause below 2,800 or break out in another leg higher towards 2,850.

But he noted the S&P is likely to consolidate the recent rally within the 2,750 to 2,800 range, until the Fed clarifies details of its plan for the balance sheet.

“Bottom Line: the Fed balance sheet specifics remains the next big macro event for US equities but this probably won’t arrive until the 3/20 meeting/press conf.,” Crisafulli wrote.


Company: cnbc, Activity: cnbc, Date: 2019-02-27  Authors: patti domm, xinhua news agency, getty images
Keywords: news, cnbc, companies, higher, reserves, trump, sheet, upside, rally, rip, fed, sp, 500, balance, wrote, tariffs, scenario, market, shock, awe


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