This year has been a shaky one for the US. So, anxious about the outlook for the economy and markets, investors will be poring over any data that can offer more insight. Next week, that’ll include consumer sentiment and inflation data prints. And, of course, any surprise policy announcements from the president, or news of retaliation measures from the countries facing US tariffs. That consumer sentiment number will be worth watching. The measure fell to 64.7 in February, the lowest level since November 2023. And you can’t blame any wildcards for throwing off the average, either: the drop was widespread across groups by age, income, and wealth. Analysts expect the stat to work its way up to 67.2 this time – but with tariffs worrying price-conscious consumers, that’s far from guaranteed. January’s inflation reading came in a touch higher than expected at 3%, suggesting that interest rates may be struggling to curb rising prices. Analysts have predicted the same number for February. Either way, the Federal Reserve will likely take its time before lowering interest rates. See, the jury’s out on how new government policies – namely, tariffs and immigration – will play out, but they risk stoking inflation. Of course, the other side of the equation is to allow the economy to progress. That’s why, concerned about a possible economic slowdown, traders expect between two and three interest rate cuts this year. Investors have already reduced their expectations for US stocks a little. But if trade wars escalate, or if the murky economic outlook impacts investment and spending, there could be further for them to fall. The S&P 500 and Nasdaq indexes have both slipped to trade close to their 200-day moving averages. Technical analysts, investors, and hedge funds – all of whom offer serious support to stocks – watch this indicator, so you’ll want to keep tabs next week too. And to make sure you can sleep soundly at night, you might consider hedging concentration risks by diversifying your portfolio. |
