What happened this week

The stock markets opened higher on Monday morning, in the hopes of recovering some of the losses from the worst week 2023 so far. The markets suffered last week primarily in the wake of higher than expected Personal Consumption Expenditures (PCE)- which is the Fed’s preferred gauge on inflation. Investors continue to be cautious of the interest rate hikes, as the Federal Reserve raises interest rates to the highest level in 40 years. 

The two top US retailers issued cautious U.S. consumer outlooks for 2023 last week, Walmart said consumer spending would start the year strong, but fade and Home Depot expects revenue to be flat this year, but bolstered by home equity. Retailers are struggling with labor shortages; Home Depot said it would spend $1 billion to boost compensation for its hourly, front-line workers. Similarly retailers seem to be continuing to make longer-term capital investments as orders placed with US factories for business equipment increased in January by the most in 5 months.

Looking ahead to this week:

Monday Feb 27: Durable Goods Orders

Tues Feb 28: Advanced Retail Inventories; Consumer Confidence

Wed Mar 1: Construction Spending

Thurs Mar 2: Initial Jobless Claims, Productivity (revision)

Fri Mar 3: ISM Services