US Market Ahead: FOMC Decision, Housing Data, and Earnings Report to drive market momentum

March 18, 2024

This week in the US market, investors will closely monitor key economic indicators spanning housing market activity, capital flows, labour market dynamics, and business sentiment, while also scrutinising corporate earnings across sectors including logistics, technology, retail, and financial services.

Economic Data to Watch:

1. Housing Market: The Building Permits releasing on Tuesday will indicate future construction activity, impacting real estate and related industries. On the same day, the Housing Starts will measure new residential construction, reflecting the health of the housing market and affecting homebuilders’ stocks and related sectors. The MBA Mortgage Applications releasing on Wednesday will reflect mortgage loan applications, providing insights into housing market activity and interest rates.

2. Capital Flows and Investments: The Total Net TIC Flows on Wednesday measure the net inflow or outflow of capital into US assets, impacting investor confidence and asset prices. The Net Long-term TIC Flows track the flow of Treasury and agency securities, corporate bonds, and stocks into and out of the US, indicating foreign investors’ appetite for US assets and influencing bond and stock markets.

3. Monetary Policy and Banking: The anticipated Federal Open Market Committee (FOMC) Rate Decision (Upper and Lower Bound) on Thursday will influence borrowing costs, stock markets, and currency exchange rates, providing signals on future rate changes. Meanwhile, the Interest on Reserve Balances Rate affects bank lending and liquidity, influencing financial markets, and the Current Account Balance reflects the net flow of goods, services, and investments, impacting currency exchange rates and trade dynamics.

4. Labour Market: The Initial Jobless Claims and Continuing Claims, also releasing on Thursday, are key indicators influencing consumer spending, investor sentiment, and stock markets, reflecting economic health and recovery prospects.

5. Business Activity and Economic Health: The S&P Global US Manufacturing PMI, Services PMI, and Composite PMI gauge business activity across sectors, allowing assessment of economic health and sector-specific trends. There is also Leading Index that will predict future economic performance, aiding investment decisions.

6. Real Estate: The Existing Home Sales will reflect the housing market’s health, impacting real estate investments and mortgage rates.

Key Earnings Reports:

· Logistics and Delivery: As a prominent express delivery company in China, ZTO Express (Cyman) Inc (NYSE:ZTO) earnings report will provide insights into the health of the global logistics sector amid evolving e-commerce trends. FedEx Corporation’s (NYSE:FDX) earnings report will also be closely monitored for indications of supply chain dynamics and shipping trends, offering valuable insights into the global logistics and delivery industry.

· Technology and Semiconductors: Micron Technology Inc’s (NASDAQ: MU) earnings report is highly anticipated for insights into the semiconductor industry, amidst ongoing supply chain challenges and increasing demand for memory and storage solutions.

· Digital Entertainment and Media: As a leading online music entertainment platform in China, Tencent Music Entertainment Group’s (NYSE:TME) earnings report will offer insights into digital media consumption trends and user engagement metrics.

· Food and Consumer Goods: General Mills Inc’s (NYSE:GIS) earnings report will provide crucial insights into the packaged food industry, reflecting changing consumer preferences and supply chain disruptions.

· Financial Services and Insurance: Prudential PLC’s (NYSE:PUK) earnings report will offer valuable insights into the insurance and asset management sectors, amidst market volatility and regulatory changes.

· Apparel and Retail: Lululemon Athletica Inc’s (NASDAQ: LULU) earnings report will be closely watched for indications of consumer spending trends and the resilience of the retail sector, particularly in the athleisure apparel segment. Nike Inc’s (NYSE:NKE) earnings report holds significance for the sportswear industry and broader retail landscape, reflecting consumer sentiment and brand strength amidst economic uncertainties.

· Professional Services and Consulting: As a leading global professional services company, Accenture PLC’s (NYSE:ACN) earnings report will offer insights into the consulting and technology services sectors, amidst increasing demand for digital transformation solutions.

· Education and Publishing: Scholastic Corporation’s (NASDAQ:SCHL) earnings report will provide insights into the publishing and educational services sectors, reflecting evolving digital learning trends and educational paradigms.

As market participants navigate through the influx of information, the week’s developments will undoubtedly provide valuable insights into the underlying trends and potential opportunities in the ever-evolving landscape of the US economy and financial market.

Disclaimer: ProsperUs Content Manager Hailey Chung doesn’t own shares of any companies mentioned.

Hailey Chung

As a lifelong learner, Hailey strives to simplify finance for everyday investors, making it relatable and enjoyable. She desires to support investors with various background, whether they are grappling with limited time and resources in seeking financial freedom or are sincere in stewarding their money well as a token of gratitude for God's provision. With a focus on responsible investing, Hailey balances caution and opportunity, believing life's too short to stress over market fluctuations. Beyond the pursuit of profits, she advocates for investments aligned with building a better world. As Manager of Content at ProsperUs, she leverages her journalism background from The Edge Malaysia, where she honed her skills at the capital and corporate desk.

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