What to Expect in the Markets Next Week

Next week, we’ll receive the latest updates on home prices, with the Case-Shiller National Home Price Index and the FHFA House Price Index (HPI) for January. On Friday, the Bureau of Economic Analysis (BEA) will release the Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred gauge of inflation—for February. Consumer sentiment readings from the Conference Board and University of Michigan will also become available on Tuesday and Friday, respectively.

Events Calendar:

Monday, March 27

• BioNTech (BNTX), H World Group Ltd. (HTHT), Carnival Corporation (CCL), PVH Corp. (PVH), and Reata Pharmaceuticals (RETA) report earnings
• Dallas Fed Manufacturing Index (Mar)

Tuesday, March 28

• Micron Technology Inc. (MU), Lululemon Athletica (LULU), Walgreens Boots Alliance (WBA), McCormick & Company (MKC), and Jefferies Financial Group (JEF) report earnings
• Retail Inventories (Feb)
• Wholesale Inventories (Feb)
• S&P Case-Shiller National Home Price Index (Jan)
• Freddie Mac House Price Index (Jan)
• CB Consumer Confidence Index (Mar)
• Richmond Fed Manufacturing Index (Mar)

Wednesday, March 29

• Cintas Corporation (CTAS), Paychex Inc. (PAYX), Concentrix Corp. (CNXC), RH (RH), Unifirst Corporation (UNF), and Lithium Americas Corp. (LAC) report earnings
• Pending Home Sales (Feb)

Thursday, March 30

• Yamana Gold Inc. (AUY), National Beverage Corp. (FIZZ), Neogen Corporation (NEOG), Braze Inc. (BRZE), Rumble Inc. (RUM), and BlackBerry Ltd. (BB) report earnings
• Corporate Profits (Q4 2022)
• U.S. GDP Growth Rate - Final Reading (Q4 2022)
• Real Consumer Spending - Final Reading (Q4 2022)
• Quarterly PCE Price Index - Final Reading (Q4 2022)

Friday, March 31

• Personal Income and Spending (Feb)
• Personal Consumption Expenditures (PCE) Price Index (Feb)
• Michigan Consumer Sentiment Index (MCSI) - Final Reading (Mar)
• Chicago Purchasing Managers’ Index (PMI) (Mar)
  

Home Price Updates

On Tuesday, index provider S&P Global will release its Case-Shiller National Home Price Index for January, while the Federal Housing Finance Agency (FHFA) will issue its House Price Index (HPI), tracking prices of single-family homes nationwide. Home prices as reported by the Case-Shiller Index are projected to have fallen 0.9% in January, marking the seventh consecutive monthly decline. Year-over-year, prices likely rose just 3.7%, decelerating from 4.6% in December and marking the slowest annual growth rate since June of 2020.

The U.S. housing market has entered a sharp slowdown in recent months as a combination of rising mortgage rates, falling affordability, and limited inventory weighs on demand. The average rate on a 30-year fixed-rate mortgage currently hovers around 6.4%, up from 4.4% this time last year, according to Freddie Mac.

The Fed's Preferred Inflation Gauge

On Friday, the Bureau of Economic Analysis (BEA) will issue the latest Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. The index is projected to have risen 0.5% last month, after rising 0.6% in January. On an annual basis, the index likely rose 5.1%, decelerating from 5.4% in January and recording the slowest annual gain since September of 2021. Core prices, which exclude volatile food and energy costs, likely rose 0.4% compared to January, and 4.7% year-over-year.

The PCE Price Index is the Fed’s preferred gauge for measuring inflationary pressures as it more closely tracks spending decisions by U.S. consumers. The basket of goods and services comprising the index is updated more frequently than the Consumer Price Index (CPI), which uses a fixed basket of goods. The Fed targets a 2% annual rate of PCE inflation.