New week, it will be more of the same when it comes to issues facing the market. At least there’s one less headache: no more worrying about another U.S. government shutdown.
On Tuesday, the Conference Board will report its latest Consumer Confidence Index results for February. The key element to focus on will be consumer sentiment six months out, but the survey cut-off date is typically mid-month and February’s reading might still have some overhang from leftover concerns about another government could shutdown again. While federal workers were temporarily back to work at the beginning of the month, the funding to reopen the government was good only until Feb. 15, likely around the time of the mid-month cut-off date for survey results. Politicians didn’t reach a funding deal until Feb. 15, so there’s a chance March’s report might provide a better read on consumer confidence sentiment over the short-term.
Brexit: Across the pond, U.K. Prime Minister Theresa May has 36 days to go to find some resolution before the scheduled exit from the European Union. On Friday, reports surfaced that conservative MPs could be preparing to vote against the government. If successful, that would block the U.K. leaving without a deal in place and extend the exit deadline. Having a deal in place would ensure an orderly exit from the European Union.
Trade War: One more week to go before the March 1 deadline when the U.S. plans to raise tariffs to 25 percent on $200 billion in Chinese imports, but indications are that U.S. President Donald Trump might be open to an extension. He’s said that was a possibility, depending on how talks go. He’s already postponed the deadline once, from the initial Jan. 1 date to allow for continued trade talks.
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On Friday, word surfaced that the two countries have started to outline six different proposals “in principle” to resolve the seven-month dispute. High-level talks in Beijing began in earnest last week, and then resumed on Thursday and Friday in Washington, D.C. It appears that talks are calling for separate proposals for each sticking point of the trade deal, such as one for intellectual property and another for forced technology transfer and cyber theft. The two are said to be the key U.S. concerns. There are other negotiating points, such as agriculture and currency.
Economy: There’s been some concern of an economic slowdown in the U.S. and possibly a recession later in the year. Mark Zandi, economist at Moody’s Analytics said in a U.S. macro outlook report Wednesday that the “economic expansion feels surprisingly tenuous.” He noted concern and “nervousness around whether the U.S. economy is at the start of a more serious slowdown or potentially even a recession.” Real GDP growth is expected to tally up at near 2 percent in the fourth quarter of 2018, and tracking at the same rate for the current quarter. He noted that consumers will hold the key to whether the slowdown will be temporary or turn into something more serious.
One indicator to keep tabs on would be the latest Consumer Confidence Index reading on Tuesday from The Conference Board.
Earnings: Earnings season continues, this time with fourth quarter results from Macy’s Inc., TJX Cos. Inc., Gap Inc., J.C. Penney Co. Inc. and Nordstrom Inc., to name a few.
Trade Show: Milan Fashion Week continues through the weekend until Monday, and then it’s time to pass the baton to the Parisians. Paris Fashion Week runs through March 5. Stateside, Jacob K. Javits Convention Center will be the go-to place Monday through Wednesday for the Coterie, Moda and Fame fashion trade shows, along with Sole Commerce for footwear brands.