What To Expect in the Markets This Week

Market watchers will be focused on comments from Federal Reserve Chair Jerome Powell on Wednesday after this week’s decision on interest rates, which are expected to remain unchanged.

Friday is the deadline for passage of several government spending bills, risking a shutdown if a legislative package or extension isn’t approved by then. 

Corporate earnings reports will come in from Micron Technology Inc. (MU), General Mills Inc. (GIS), Nike Inc. (NKE), FedEx Corp. (FDX) and Chinese EV maker Xpeng Inc. (XPEV). On Monday, Nvidia Corp.’s (NVDA) annual “GTC,” or Global Processing Unit Technology Conference for artificial intelligence (AI) developers kicks off with a keynote address by founder and CEO Jensen Huang.

Monday, March 18

• Homebuilder confidence (February)
• Nvidia GTC (Global Processing Unit Technology Conference) keynote address by founder and CEO Jensen Huang
• Science Applications International Corp. (SAIC) reports earnings

Tuesday, March 19

• Housing starts (February)
• Building permits (February)
• HealthEquity Inc. (HQY) and Xpeng report earnings

Wednesday, March 20

• Federal Open Market Committee (FOMC) interest rate decision
• Federal Reserve Chair Jerome Powell’s press conference
• Micron Technology, General Mills, Five Below Inc. (FIVE), Chewy Inc. (CHWY), KB Home (KBH), and Ollie’s Bargain Outlet Holdings Inc. (OLLI) report earnings

Thursday, March 21

• Initial jobless claims (Week ending March 15)
• Philadelphia Fed manufacturing survey (March)
• S&P flash U.S. Services Purchasing Managers Index (PMI) (March)
• S&P flash U.S. manufacturing PMI (March)
• U.S. leading economic indicators (February)
• Existing home sales (February)
• Accenture PLC (ACN), Nike (NKE), FedEx (FDX), and Lululemon Athletica Inc. (LULU) report earnings

Friday, March 22

• Spending bill deadline to avoid partial federal government shutdown

Interest Rate Decision, Powell Comments Come Amid Higher Inflation Readings

While there is little doubt that the Federal Reserve will leave interest rates unchanged at its meeting this week, there will be plenty of investor attention given to remarks from Fed Chair Powell on Wednesday.

The Federal Open Market Committee (FOMC) is widely expected to keep its influential fed funds interest rate at 5.25% to 5.5%. Investors are pricing in a 99% probability that officials will leave rates untouched, according to the CME FedWatch tool. FOMC officials have said they would need to see more progress on inflation before voting to lower interest rates.

With a rate cut all but off the table for this meeting, eyes will turn to officials’ economic outlook and rate cut projections that will be outlined in the dot plot. Economists think there’s a possibility officials could pare back their expectations for three cuts this year afterinflation data came in hotter than anticipated last week.

Spending Bill Deadline Looms at Week’s End

Congress has until Friday to pass six pieces of government funding legislation and avoid a shutdown of several government agencies. 

Congress passed a legislative package to provide funding for several agencies earlier this month, and now legislators are looking to finish its 2024 budget process by agreeing on the remaining spending. 

The remaining bills would cover about 70% of government spending including on military, health, education and labor programs. Congress could also pass another temporary extension to avert a shutdown if it can’t agree on a larger spending package. 

Reddit, Astera Labs Could Potentially Debut

Reddit and Astera Labs could begin trading as early as this week, according to reports.

Reddit is expected to trade on the New York Stock Exchange (NYSE) under the symbol “RDDT,” as the social media site and its investors aim to raise up to $748 million in its long-awaited IPO. This is the second time Reddit has filed to go public.

Astera Labs could ride the AI wave, with the company and its investors looking to raise up to $534 million in its IPO. The company, which provides semiconductor-based connectivity solutions for cloud and AI infrastructure, is expected to trade on the Nasdaq under the ticker symbol “ALAB.”

Tech Companies, EV Maker on Earnings Calendar

Technology companies, apparel makers, and retailers are among the companies scheduled to report earnings this week. 

Chinese EV maker Xpeng will post quarterly results on Tuesday, as the company continues its price competition with Tesla Inc. (TSLA) and others in the China marketplace. 

Micron Technology’s earnings report on Wednesday comes after it announced a deal with Nvidia to make memory chips for its AI GPUs. 

Investors on Thursday will be watching Nike’s report for signs of recovery after the shoemaker cut its outlook amid soft demand. Athletic clothing company Lululemon looks to follow up on its prior earnings report that sent the stock to an all-time high on strong sales and better-than-expected earnings.