The Week Ahead

Last week U.S. equities were volatile in a shorted trading week and received a boost on Wednesday after Iran’s oil minister Bijan Zanganeh agreed to go along with a plan worked out the previous day between OPEC leading member Saudi Arabia and Russia to freeze oil production at January levels which provided some relief with falling crude oil prices.

Brent crude rose 7.5 percent on Wednesday after the news.

Crude oil has fallen over 17 percent this year due to concerns of a glut in crude oil, weaker global demand, and no oil production cuts.

The deal worked out last week between Saudi Arabia (OPEC)and Russia (non-OPEC) falls short of a production cut but offers some pre-determined guidelines about maintaining oil production levels.

For the week, the Nasdaq rose 3.9 percent, the S&P 500 gained 2.8 percent, and the Dow Jones increased 2.6 percent.

Last Friday the U.S. equity market was mostly flat as investors weighed CPI inflation figures for January that was  flat at 0.0 percent and remains weak, held back by a 2.8 percent drop in the energy index, according to the latest report from the Bureau of Labor Statistics.

Over the past year, the energy index has declined 6.5 percent, representing the smallest 12-month decrease since November 2014.

CPI rose 1.4 percent over the last 12 months with the all items index before seasonal adjustment.

Core CPI Inflation

The index for all items, less food and energy, rose 0.3 percent in January, above the 0.1 percent consensus forecast from and increased 2.2 percent over the last 12 months, a level that has been gradually increasing over the last several months.

Although the Federal Reserve pays attention to CPI inflation figures, the PCE Price Index is the preferred inflation metric for basing its monetary policy and deciding about interest rate increases.

On Friday investors will receive a new PCE  inflation reading for the month of January.

Economists from forecast a Core PCE consensus estimate of 0.1 percent in January.

Last month, the December PCE Index, excluding food and energy, increased 1.4 percent from December 2014 and remains below the Fed’s 2 percent inflation target.

The week ahead will see little economic data released as earnings season winds down.

On Tuesday the consumer confidence reading for February will come into focus along with existing home sales for January.

On Wednesday the market will digest new home sales for January and crude inventories.

Durable orders for January will be reported on Thursday.

The second estimate of Q4 2015 GDP will be released on Friday alongside PCE inflation for January.

Economists from have a consensus GDP forecast of  0.4 percent after rising 0.7 percent in its first reading.

Full Calendar

Monday- No economic reports

Tuesday-Consumer Confidence (Feb), Case-Schiller 20 city Index (Dec), Existing Home Sales (Jan).

Wednesday- New Home Sales (January) MBA Mortgage Index (2/20), Crude Inventories (2/20).

Thursday- Durable Goods (Jan), Initial and Continuing Jobless Claims, FHFA Housing Price Index (Dec) and Natural Gas Inventories (2/20).

Friday- PCE inflation (Jan), Personal Income/Personal Spending (Jan), GDP 4th Q 2015 (2nd estimate).





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