The conflict in Ukraine remains at the forefront for investors. The Federal Open Market Committee (FOMC) raised rates, but the outlook for further rate hikes is more aggressive.
The Russian invasion of Ukraine remains a key factor for financial market traders and investments alike. In the week ahead, the economic data releases are not critical. Durable goods orders should reflect a decrease in civilian aircraft orders (moderate otherwise). Monday at noon, Fed Chair Powell will speak to the National Association for Business Economics on the economic outlook, but will not say anything new or that was not vetted by the speech writers. Inflation should reflect the higher gasoline prices and will remain elevated.
Happy Monday. Good Luck out there this week.
Global Spotlight
South African trade union negotiations begin. From March 17 through the end of the month, South African trade unions representing 1.2 million public servants will consolidate and present wage adjustment demands to the Department of Public Service and Administration.
India engages with fellow Quad members. In the coming days, India will hold separate meetings with fellow Quadrilateral Security Dialogue (better known as the Quad) members Japan, the United States and Australia. Japanese Prime Minister Fumio Kishida will visit India for a two-day summit on March 19-20 to discuss bilateral ties and strengthening Tokyo and New Delhi’s cooperation in the Indo-Pacific region.
Biden to attend NATO and EU summits in Brussels. U.S. President Joe Biden will visit Brussels, Belgium, on March 24 for meetings with NATO and the EU Council that will both focus on the ongoing Russia-Ukraine conflict.
Hong Kong’s leader to address the public on COVID-19. On either March 20 or March 21, Chief Executive Carrie Lam is expected to address the people of Hong Kong about the future of the city’s COVID-19 management strategy, which could include protocols and timelines for universal testing, quarantines, flight restrictions and social distancing. In reference to the upcoming address, Lam noted that Hong Kongers’ tolerance of COVID-19 restrictions was wearing thin.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
The FOMC raised the target range for the federal funds rate by 25 basis points (to 0.25%-0.50%) and said that it “anticipates that ongoing increases in the target range will be appropriate.” the FOMC also noted that inflation and employment situation is improving. The implications of the Ukraine conflict to the U.S. economy are “highly uncertain,” according to the FOMC, but “are likely to create additional upward pressure on inflation and weigh on economic activity” in the near term. The Dot Plot shows, 12 anticipate raising rates another 150 basis points or more this year.
Review Last weeks numbers here.
The Dot Plot for March 2022 shows the median rate at the end of 2022 at 1.9% vs 0.9% in December. That is seven hikes in 2022 which is congruent with the market but above expectations from the Fed.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- 21Q4 Y/Y earnings are expected to be 32.0%. Excluding the energy sector, the Y/Y earnings estimate is 23.5%.
- Of the 497 companies in the S&P 500 that have reported earnings to date for 21Q4, 76.1% have reported earnings above analyst estimates. This compares to a long-term average of 65.9% and prior four quarter average of 83.9%.
- During the week of Mar. 21, 7 S&P 500 companies are expected to report quarterly earnings.
Macro Market
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