Enhanced Investor Weekly Macro Report

Jonathan Lepre and Adam Wood, Harvard University   

Published by Aaron Gose

March 5th - 9th

This week will feature global economic data news and highlight an anticipated US jobs report for February. Investors around the street are closely watching the unemployment data release, which is hovering around the 4% mark. Additionally, the ECB & BOJ will hold policy meetings, and China will be reporting trade import/export results for the most recent month.


European Central Bank Policy Meeting

The European Central Bank is broadly expected to keep interest rates at their current record low levels and make no changes to guidance on future policy during it’s Thursday meeting.

This will be the ECB’s second meeting of the year.


BOJ Policy Announcement

The Bank of Japan is also expected to keep policy at its current pace at the conclusion of its two-day session on Friday.

The expectation is to keep short-term interest rates at minus 0.1%


US February Jobs Report

This upcoming Friday will be an important day for the markets, as the Bureau of Labor Statistics latest reading on employment in the United States is expected to show the addition of 205,000 jobs in February. The chart below interestingly shows the Bureau of Labor Statistics monthly employment report since the early 2000’s to present date.



Chinas Trade Data

China is set to release February trade statistics on Thursday.

Exports are forecasted to have climbed 13.9% from the previous year, following a gain of 11.1% in the month of January, while imports are expected to rise 9.7%, after rising 36.9% in January.

Enhanced Investor Weekly Macro Report

Jonathan Lepre and Adam Wood, Harvard University   

Published by Aaron Gose

February 26th - March 2nd

The US & The Federal Reserve

On Tuesday, Jerome Powell, the new head of the Federal Reserve will deliver his inaugural monetary policy testimony on the economy before the Senate and House Committee in Washington D.C.

Inflation will remain in focus as the recent cause of volatility, as traders have been adjusting their books by a likely faster rate hike schedule than previously anticipated. Minutes of the speech will be released to the public before the actual live Powell oration.

The Fed’s next policy meeting is scheduled for March 20th-21st with a rate hike increase probability expected at 80%. Analysts across the street will jointly annotate the Powell speech minutes, as any language can forecast the Fed’s next transitory move in interest rates.

The Fed’s preferred method for inflation, Personal Income, and Consumer Spending Report will be published on Thursday. The Fed uses this metric as a benchmark in justification of keeping inflation at a steady rate of around 2%. Economists are predicting a 0.3% uptick in the index for January, following a 0.2% increase the month prior.



European economic data will also be in focus this week. Germany, France, Italy and Spain will publish each of their CPI reports throughout the upcoming week.

Bridgewater Associates, the world’s largest hedge fund, has increased its mega short position in European equities, bringing their total position value to an estimated $22 billion. European regulators require the disclosure of short positions of this size and caliber as the only intention that this data is publicly known. The reasoning behind BA’s position is not clear at the moment. However, some rationale will be discussed at the bottom of this page in the China section.

Positive inflation data in the Eurozone could contribute toward the ending of ECB stimulus. The economists’ consensus forecast is expected to show prices rose 1.2%, from 1.3% last month. The U.K. Will produce manufacturing data on Thursday, followed by labor and construction reports on Friday. The economists’ expectations are 55.0 from 55.3 in the previous month PMI metrics, and construction numbers are expected to increase slightly to 50.7 from 50.2.


Chinese Manufacturing Data

Wednesday will also highlight news out of China with CFLP manufacturing sector data for the month. The forecast for the outlook is relatively stable with a slight upturn to 51.4 from 51.3. For knowledge of this indicator, readings below 50 indicate contraction and above 50 signal expansion for growth.

Some analysts’ are anticipating the logic behind Bridgewater’s big bet against Europe is that it sees tougher times shortly for China, as the firm may recognize that European companies, such as auto manufacturers, are increasingly tied to Chinese consumer dynamics.

Enhanced Investor Weekly Macro Report

Jonathan Lepre and Adam Wood, Harvard University   

Published by Aaron Gose

February 20th - 23rd

FED FOMC Meeting Minutes

The Federal Reserve will release minutes from its most recent policy meeting on Wednesday at 2:00PM ET. The language from the minutes is carefully examined by the street in anticipation of future rate hike speed, in summation of the Fed’s current view of the economy. The Fed is scheduled to hold it’s next policy meeting on March 20-21.

A dozen Fed representatives from different locations around the US will also be speaking this week with the focus on the recent uptick in inflation. Inflation has been in high concentration as this is one of the primary metrics kept in close watch by the Federal Reserve as its target comes into range, rates may begin to rise faster than anticipated as a result of this.


Economic Data Reports & Earnings

With a Monday holiday to begin the week, trading will pick up in full force on Tuesday in the US.

The National Association of Realtors will release data on January existing home sales at 10:00AM Eastern Time on Wednesday. The forecast estimates are 5.62M vs. 5.57M in December. In a close watch with the Existing Home Sales report, Home Depot (HD) will be reporting earnings ahead of the open on Tuesday, (results at the bottom of the page).

Jobless claims weekly figures will also be in focus, with the addition of manufacturing data activity domestically.


Japan Inflation Data Report

Friday will very importantly highlight the publishing of Japan’s January inflation numbers.

Market analysts expect the metric to remain positive, rising 1.3% y over y, which would be the 13th straight month of annual growth.


Euro-Zone Economic Reports

Preliminary data on manufacturing and service sector activity for February before market open on Wednesday.

Minutes from the ECB's January economic policy meeting will be released on Thursday.


Housing Market & Home Depot Earnings Tuesday Morning

Volatile weather patterns and rising interest rates have proved to be tailwinds for growth in the homebuilder sector. Consumers are renovating homes at high rates making this area a business unit of interest. The company also hiked dividends to increase shareholder value.

Earnings per share: $1.69, adjusted, compared with $1.61 expected

Revenue: $23.9 billion, compared with $23.7 billion expected

Same-store sales: an increase of 7.5 percent, compared with 6 percent expected

Enhanced Investor Weekly Market Snapshot

Jonathan Lepre and Adam Wood, Harvard University   

Published by Aaron Gose

February 12th - 16th


Friday, February 16th was the sixth straight day of gains for the Dow and S&P 500 after an exceptionally volatile prior week. The Dow concluded with over 4% gains to top it’s the best week since November 2016. The S&P 500 concurrently increased upwards of 4% to match the index’s best week since January 2013. The NASDAQ gained 5.3% with a record dating back to year-end 2011. The Equity market did slip Friday afternoon after a press release that a federal jury indicted Russian nationals about interfering in the recent U.S. elections. Political uncertainty in the market has caused price corrections in the past and will continue to do so in the future with consistency.



Signs that the economy is continuing to grow aided stocks in progressing ahead this week and provided a calming to the storm that was last week’s volatile losses. Essential readings on import prices for January showed a monthly increase of 1%. The metric is yet another sign that the inflation pressures are growing. Data earlier in the week showed a rise in consumer-price inflation, which is closely watched by the Federal Reserve regarding interest-rate hike plans. It will be explained below in this article how inflation fundamentally affects the treasury market. The Enhanced Investor Weekly Macro 1 The Enhanced Investor Weekly Macro February 17, 2018 Construction on new homes in the United States referred to as housing starts, leaped close to 10% in January to a yearly rate of 1.33 million. That is the second highest level since the 2009 recession. The University of Michigan announced its consumer-sentiment index rose more than expected to 99.9 in February, up from 95.7 in January and the second highest level in over a decade. This index is showing the consumer is confident in their discretionary spending ability, therefore justifying a growing economy.


Bond Yields

Tuesday - 10-year note yielded 2.83%.

Wednesday saw a 2.910% yield, up 2.7% in the daily session due to the Consumer Price Index data release which showed inflation much higher than what the Street anticipated.

Thursday - closed with a 2.889% yield.

Friday - 10-year note yielded 2.867%. (Flat for the week)


Earnings Continue to Show Strength

Among the 322 S&P 500 companies that have reported quarterly results so far this earnings season, 78% topped Wall Street estimates. These results are the best in any quarter since early 2009. Regarding sales revenue per company, the performance results are the best since the early 2000s.

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