Investors will get a slight reprieve next week from the hard-hitting inflation data of the past two as Wall Street gets ready to close the books on a pretty dismal February. After a strong start to the year, this week the Dow Jones Industrial Average turned negative for the first time in 2023, marred by concerns that the Federal Reserve will start raising interest rates more aggressively again to fight stubbornly high inflation. The latest Fed projection for the so-called terminal rate — the level where the rate hikes stop — was just over 5%. The stock and bond markets are now thinking it’s going to be higher. In fact, JPMorgan CEO Jamie Dimon told Jim Cramer in an interview Thursday that he could see the terminal rate going to 6%. Cleveland Federal Reserve President Loretta Mester told CNBC on Friday that she sees a terminal rate above 5% that stays there for a while. At its most recent meeting, the Fed increased rates by a smaller 25 basis points. We haven’t seen that size hike since the first move of the current tightening cycle back in March 2022. All of the other rate hikes since then have been bigger, including a four-meeting stretch of 75-basis-point increases from June to September. The current policy rate range is 4.5% to 4.75%. The odds of a half-point hike at next month’s meeting, according to the CME FedWatch tool , increased to nearly 30% after Friday’s release of a hotter-than-expected core personal consumption expenditures (PCE) price index for January. That’s the Fed’s preferred inflation gauge. The PCE data creep was in line with greater-than-expected January gains in consumer and producer prices, which were out on Feb. 14 and 15, respectively. The Dow and S & P 500 on Friday dropped nearly 1% each on the PCE news, while the Nasdaq gave back more than 1.5% — all capping their worst weeks of 2023. The yields on the 10-year Treasury and the 2-year finished Friday near 4% and 4.8%, respectively. Before this past week, those intraday levels hadn’t been seen since November 2022. The U.S. dollar index settled Friday around 105. Gold was under $1,820 per ounce. WTI crude prices were in the mid-$70s per barrel. Next week is light on economic data. The first Friday of a new month almost always brings the government’s latest employment report. But this is one of those rare weeks when it doesn’t. The February jobs data will, instead, be released on March 10 — leaving the market to focus more fully on corporate earnings. In a rare weekend report, Berkshire Hathaway (BRK) earnings will be released Saturday along with Warren Buffett’s annual letter to shareholders. Club holding Salesforce (CRM) reports its quarter after the closing bell Wednesday and Costco (COST), also in the Club, is out after the close Thursday. We’ll discuss all the stocks in our portfolio at Saturday’s first-ever annual meeting for Club members. Here’s the link to the livestream. Here are some other earnings reports and all the economic numbers to watch in the week ahead: Monday, Feb. 27 Before the bell: AES Corp (AES), Viatris (VTRS) After the bell: Acadia Healthcare (ACHC), Occidental Petroleum (OXY), Workday (WDAY), Zoom Video (ZM) 8:30 a.m. ET: Durable Goods Orders 10 a.m. ET: Pending Home Sales Tuesday, Feb. 28 Before the bell: ADT Corp (ADT), Advance Auto Parts (AAP), AutoZone (AZO), JM Smucker (SJM), Norwegian Cruise (NCLH), Sempra Energy (SRE), Target (TGT) After the bell: Agilent Tech (A), AMC Entertainment (AMC), Monster Beverage (MNST), Ross Stores (ROST) 10 a.m. ET: Consumer Confidence Wednesday, March 1 Before the bell: Abercrombie & Fitch (ANF), Dollar Tree (DLTR), Kohl’s (KSS), Lowe’s (LOW), Wendy’s (WEN) After the bell: American Eagle Outfitters (AEO), Cano Health (CANO), Pure Storage (PSTG), Snowflake (SNOW), Splunk (SPLK) 10 a.m. ET: Construction Spending 10 a.m. ET: ISM Manufacturing Thursday, March 2 Before the bell: Anheuser-Busch InBev (BUD), Best Buy (BBY), Big Lots (BIG), Burlington (BURL), Kroger (KR), Macy’s (M) After the bell: Broadcom (AVGO), Dell (DELL), Hewlett Packard (HPE), Marvell (MRVL), Nordstrom (JWN), VMware (VMW), Zscaler (ZS) 8:30 a.m. ET: Productivity and Labor Costs 8:30 a.m. ET: Initial Claims Friday, March 3 10 a.m. ET: ISM Services Looking back January’s hot reading on core PCE on Friday was the most influential economic number of the past week. Also on Friday, consumer spending and personal income in January each rose more than expected . This past Thursday, the government’s second look at GDP in the fourth quarter showed a 2.7% advance, which was slower than the first estimate and expectations. Wednesday, minutes from the Fed’s Jan. 31-Feb. 1 meeting showed policymakers’ resolve to keep fighting inflation with rate hikes. Existing home sales dropped to the lowest level in more than 12 years in January, according to data released Tuesday. In Club earnings this past week, Nvidia (NVDA) was certainly the highlight. The stock surged 14% on Thursday, the day after a solid quarter and strong guidance . We’re really looking forward to the company’s big developers conference next month when we hope to learn more about the chipmaker’s innovations in artificial intelligence. Bausch Health Companies (BHC) on Thursday reported fourth-quarter results that beat expectations , even as an ongoing patent dispute keeps us skeptical about the stock’s ability to stage a sustained rebound. But we’ll take Thursday’s 14% gain in BHC shares. Off-price retailer TJX Companies (TJX) on Wednesday reported a solid quarter , which prompted us to raise our price target on the stock. Palo Alto Networks (PANW), our newest holding, jumped 12.5% on Wednesday, the day after a blowout quarter. We’re sure glad started our position a week before earnings. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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People walk by the New York Stock Exchange (NYSE) on February 14, 2023 in New York City.
Spencer Platt | Getty Images
Investors will get a slight reprieve next week from the hard-hitting inflation data of the past two as Wall Street gets ready to close the books on a pretty dismal February.
