Inflation readings next week will have to show that the rosy macroeconomic outlook underpinning the bull case for stocks remains intact, in order to reassure a whipsawed market swinging between the latest earnings news and the latest tariff updates. Wall Street is in for a quieter economic calendar in the week ahead, but investors will still pay great attention to the January consumer and producer price indexes after Friday’s economic data revived concerns around inflation. The January jobs report showed stronger wage growth, an inflationary signal, while a drop in consumer sentiment reflected growing concerns of rising pricing pressures from tariffs. Treasury yields spiked higher on those worries. Overall, markets should take the datasets in stride, as they are unlikely to move the needle as to what the Federal Reserve will do with interest rates. The CME FedWatch Tool shows just one quarter-point cut is priced in for the balance of the year, possibly coming at mid-year. Still, investors re main concerned about the possibility of an out-of-consensus inflation number that threatens the current interest rate outlook. “You’d need something relatively above consensus to put much of a scare in markets,” said Art Hogan, chief market strategist at B. Riley Financial. “I think that’s the only fear we have right now. Even if it were to come in cooler than expected, I don’t think that pulls forward any monetary policy contemplation.” .SPX 5D mountain S & P 500 Consumer prices are anticipated to have eased, with CPI cooling to an annual rate of 2.8% in January, down from 2.9%, according to FactSet. Core inflation, which strips out volatile food and energy prices, is expected to fall to 3.1%, from 3.2%, on a 12-month basis. Producer prices, which measure wholesale inflation, is also set to fall, to 3.1% from 3.3% on a 12-month basis. Excluding food and energy, it’s expected to have drop to 3.2% from 3.5%. Trade volatility For the most part, the strong economy has kept investors optimistic on the stock market outlook. With the Atlanta GDPNow forecasting model showing GDP running at a 2.9% pace, unemployment at 4%, inflation somewhere in the 2% to 3% range and anticipated earnings growth of about 16%, many investors expect the S & P 500 could be due for another double-digit rise in 2015 — even after the monster gains of the past two years. “I think we’re probably just in store for a relatively healthy year,” said David Miller, investment chief at Catalyst Funds. “Valuations aren’t very cheap coming in, so it’s probably not going to be huge. … But valuations aren’t out of whack either. So I think somewhere in the 10% to 15% type of S & P return type year is the most reasonable assumption.” Still, many investors remain wary that an onslaught of policy updates out of Washington could roil equities, as they have this week. The blue-chip Dow Jones Industrial Average started the week briefly sliding more than 600 points on tariff headlines Monday morning, before recouping all its losses, and then falling again on Friday. “We’re always kind of on guard for a tariff announcement,” B. Riley Financial’s Hogan said. “And there’s the potential that that is the next thing that kind of catches us by surprise.” Still, the strategist said the confirmation of some Cabinet postings next week could also give markets some “potential positives” from the new administration. “That could be next week’s business where we start to get approvals,” Hogan said. “Because what that will usher in is for some of that lighter regulatory touch as we start to have new heads of departments. And that could be a counterbalance to what the perceived negative is over tariffs.” Tariffs also muddy company forecasts, with a number of firms this week blaming a stronger dollar for their own lower financial forecasts. In fact, the number of S & P 500 companies mentioning “tariffs” in their earnings calls reached its highest going back to 2019, according to FactSet data. If that were to continue for the rest of the current earnings season, the fourth quarter could see the greatest number of tariff mentions than in any other quarter of the past decade, FactSet senior earnings analyst John Butters wrote. On Friday, stocks were headed for a mixed week. The Dow Jones Industrial Average and Nasdaq Composite were each set to close out the week with losses, while the S & P 500 was ekeing out a tiny gain. Week ahead calendar All times ET. Monday, Feb. 10 Earnings: ON Semiconductor , Rockwell Automation , McDonald’s Tuesday, Feb. 11 6 a.m. NFIB Small Business Index (January) 3:30 p.m. New York Federal Reserve Bank President and CEO John Williams gives keynote remarks at Pace University, New York Earnings: Gilead Sciences , Coca-Cola , Fidelity National Information Services , Ecolab , Marriott International, Humana Wednesday, Feb. 12 8:30 a.m. Consumer Price Index (January) 8:30 a.m. Hourly Earnings (January) 8:30 a.m. Average Workweek (January) 2 p.m. Treasury Budget (January) Earnings: Paramount Global , MGM Resorts International , Global Payments , Cisco Systems , Tyler Technologies , Dominion Energy , Albemarle , Kraft Heinz, CME Group , Martin Marietta Materials , Westinghouse Air Brake Technologies , CVS Health , Generac Holdings , Exelon , Biogen Thursday, Feb. 13 8:30 a.m. Continuing Jobless Claims (02/01) 8:30 a.m. Initial Claims (02/08) 8:30 a.m. Producer Price Index (January) 12:20 p.m. New York Federal Reserve Bank Director of Research Kartik Athreya speaks at the University of Bridgeport, Ernest C. Trefz School of Business 1 p.m. New York Federal Reserve Bank Interim Head of the Markets Group Anna Nordstrom gives opening remarks in “Women in Fixed Income Conference”, New York Fed 4 p.m. New York Federal Reserve Bank Director of Research Kartik Athreya speaks on “Economic Outlook with a Focus on Regional Business Conditions”, Connecticut 5:15 p.m. New York Federal Reserve Bank Deputy SOMA Manager Julie Remache gives closing remarks in “Women in Fixed Income Conference”, New York Fed Earnings: Motorola Solutions , Airbnb, Wynn Resorts , Applied Materials , Ingersoll Rand , GoDaddy , DexCom , PPL , Howmet Aerospace , Duke Energy , Molson Coors Beverage , GE Healthcare Technologies , West Pharmaceutical Services , PG & E , Deere & Co. Friday, Feb. 14 8:30 a.m. Export Price Index (January) 8:30 a.m. Import Price Index (January) 8:30 a.m. Retail Sales (January) 9:15 a.m. Capacity Utilization (January) 9:15 a.m. Industrial Production (January) 9:15 a.m. Manufacturing Production (January) 10 a.m. Business Inventories (January) Earnings: Moderna
Key inflation readings, earnings next week have to reassure a worried market