- The IPC inflation report will be released on Wednesday.
- Economists expect it to work slightly.
- Oracle and Dollar General are among the key profit reports published this week.
Investors will focus this week on the Consumer Price Index (CPI), which will be released on Wednesday morning. The main inflation meter has increased for four consecutive months, reaching 3% in September, the highest reading since last June.
The consensus among economists requires that IPC inflation decrease at a basic 2.9% point in February, which would end its streak of four -month increases. That 2.9% increase would be in the last 12 months. Only for the month of February, economists anticipate that inflation increases 0.3%, which would be below the rate of 0.4% January.
It is expected that the central CPI, which excludes food and energy prices, increases 3.2% year after year, which would be the same as January.
Speaking last week in New York, the president of the FED, Jerome, reiterated his previous position that the Fed is not in a hurry to reduce interest rates from its level from 4.25% to 4.50%. He described the two scenarios that would precipitate a change in monetary policy.
“If the economy is still strong, but inflation does not continue to advance sustainably towards 2 percent, we can maintain policy restriction for longer,” Powell said. “If the labor market will weaken unexpectedly or inflation fell more quickly than expected, we can relieve politics accordingly.”
Concerns about tariffs
The markets have been nervous about the tariff threats of the Trump administration again. But they should not have a great impact on inflation rates in February, since they have now delayed, mostly, until at least April.
However, in the long term, if they are implemented in Canada and Mexico, together with China and perhaps in other places, they could affect inflation rates.
“Prolonged tariffs probably exert upward pressure on the inflation of the United States, since national importers will probably spend part of the highest cost of consumer rates,” said Angelo Kourkafas, Edward Jones market analyst. “In addition, retaliation rates, such as those collected by Canada, could have a significant impact on industries such as cars, which have highly integrated supply chains in North America, with pieces that cross the border several times before the final assembly.”
The new Prime Minister of Canada, Mark Carney, said this week that some of the retaliation rates in the United States will not be raised, but that they entered into force in March and will not affect this IPC report.
Oracle among key profits this week
The first quarter’s profit season is running out, but there are still some big names that report this week. Among them is the Oracle Technology Company (NYSE :), which releases profits on Monday after the market closes.
The cloud computing giant recently announced that it is part of a $ 500 billion project called Stargate to build AI data centers and AI infrastructure. Analysts anticipate profits of $ 1.49 per share. Oracle stock has dropped 7% YTD.
Other notable earnings this week include Dick’s Sporting Goods (Nyse 🙂 and Kohl’s (Nyse 🙂 Tuesday; Adobe (Nasdaq :), Irobot (Nasdaq 🙂 and American Eagle Outfitters (Nyse 🙂 Wednesday; and General Dollar (Nyse 🙂 and Ult Beauty (Nasdaq 🙂 Thursday.
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