March 4th Week Ahead: Powell, ECB, NFPs & Earnings

This week, traders, investors, and consumers will have their eyes set on the upcoming Powell testimony, European Central Bank (ECB) rate decision, US Nonfarm Payrolls (NFPs), and Retail Earnings releases. 

Powell Testifies: What Will the Fed Chair Reveal? 

Federal Reserve Chair Jerome Powell is set to testify twice this week.

On Wednesday, March 6th, he will testify before the House committee, and on Thursday, March 7th, he will testify before the Senate. 

Given the fact that Powell is the Chair of one of the world’s most powerful central banks, it is no surprise that his speeches are often highly anticipated. The upcoming testimony becomes especially important because it is set to take place less than two weeks ahead of the Fed’s 2-day monetary policy decision. (Source: Federal Reserve)

Therefore, any new information and revelations can affect the trajectory of the US economy and provide both traders and consumers with much-needed insights about where the economy might be headed.

While the Fed’s monetary policy path is still unclear, the anticipations are that Powell will likely reveal that the central bank will adopt a “cautious” approach before it begins its expected interest rate cuts. 

ECB Decision: Which Route Will the Eurozone’s Central Bank Take?

The Eurozone’s central bank, the ECB, is scheduled to meet on Thursday, March 7th. The meeting comes after the ECB “pushed back on rate cut talk,” as it searches for further proof of inflation nearing the 2% target rate as mentioned last week by ECB President Christine Lagarde. Additionally, recently released data from the Eurozone showed a below-expected slowdown in inflation in February, which may further support the ECB’s caution.

Accordingly, many expect the ECB to maintain its rate at a 4.5% level whilst opting for a “less hawkish tone,” but only time will tell what this central bank will actually decide. 

NFPs: How Is the World’s Largest Economy’s Labor Market Faring?

The US NFPs (Nonfarm payrolls) for February are set to be published on Friday, March 8th. NFPs are a measure of the health of the US labor market as they reflect the number of US employees excluding those working in private households, non-profit organizations, military, and farming. 

As such, amidst the slightly weaker Gross Domestic Product (GDP) in Q4 and a slightly higher inflation rate, monitoring any updates in the US labor market may be crucial to understanding the health of the US economy better. 

Following the addition of a whopping 353,000 jobs in January, February’s NFPs are expected to show an addition of 190,000 jobs on a moderate wage increase and a 3.7% unemployment rate. 

Retail Earnings Releases: What Will the Data Reveal?

In addition to the upcoming economic data, traders and investors may want to keep tabs on this week’s earnings releases to see what the results might reveal about the retail sector and consumer spending.

Among this week’s main earnings reports are Target, Costco, and Ross Stores. 

Target 

Retail giant Target (TGT) is scheduled to report its earnings on Tuesday, March 5, before the ring of the bell. The company is expected to report an EPS of $2.42 on revenues of $31.86 billion.

Ross Stores 

American discount department store chain Ross Stores (ROST) is expected to report earnings on Tuesday, March 5th, after market close. Many analysts expect the company to report an EPS of $1.65 and a revenue of $5.8 billion. 

Costco

US retailer Costco Wholesale (COST) is scheduled to report its earnings on Thursday, March 7th, after market close. Market experts expect the company to report an EPS of $3.62 on revenue of $59.2 billion.

Conclusion 

This week is eventful, with a plethora of economic and market events taking place. Keeping track of the results will help traders and market watchers understand the overall state of the economy and the financial markets.