Highlights this week

The economic and earnings calendar slowed a bit last week, but markets positively received this seeming lack of news as each of the major US indexes closed the week at fresh records.
The Dow gained 96 points to close at 20.269.37, the S&P 500 gained 8 points to close at 2,316.10, while the Nasdaq added 19 points to close at 5,734.13.
Much of the focus was, of course, on the goings on down in Washington, with perhaps the most notable development crossing in the final few hours of trade on Friday.
On Friday afternoon, Federal Reserve board governor Daniel Tarullo said he would resign from the Fed, leaving the central bank on or around April 5. This now creates three openings at the Fed for the Trump administration to fill.
Tarullo, we’d note, was the Fed governor in charge of overseeing financial regulation. A major part of the post-election rally in stocks was centered on the financial sector, as a partial or full roll-back of the Dodd-Frank regulations put in place after the financial crisis was seen as a positive for the sector.
The departure of Tarullo from the Fed board now not only allows the Trump administration to put a major imprint on the Federal Reserve, but gives added juice to an investing thesis predicated on decreased regulation in the financial sector.

Earlier in the week, stocks rallied after Trump said that his administration would, in the next couple weeks, be announcing something that is “phenomenal in terms of tax.” And now, maybe something phenomenal on regulation, too.

Looking quickly to this week, the earnings calendar will slow some, though we will get headline reports from T-Mobile (TMUS), Molson Coors (TAP), LendingClub (LC), Hilton Worldwide (HLT), PepsiCo (PEP), Cisco (CSCO), CBS (CBS), Kraft Heinz (KHC), and Deere (DE).

On the economic data side, the week’s reports will be the monthly updates on consumer prices and retail sales, which are both due out on Wednesday.

Investors will also hear from Fed Chair Janet Yellen on Tuesday and Wednesday as she’ll deliver he bi-annual testimony before Congress and face questions from lawmakers.

Economic calendar
- Monday: No major economic data released.
- Tuesday: NFIB small business optimism, January (105.0 expected; 105.8 previously); Producer prices, January (+0.3% expected; +0.3% previously)
- Wednesday: Empire State manufacturing (7.0 expected; 6.5 previously); Consumer price index, January (+0.3% expected; +0.3% previously); “Core” consumer price index, year-on-year (+2.1% expected; +2.2% previously); Retail sales, January (+0.1% expected; +0.6% previously); Industrial production (+0% expected; +0.8% previously); Homebuilder sentiment, February (67 expected; 67 previously)
- Thursday: Housing starts, January (+0.1% expected; +11.3% previously); Building permits, January (+0.2% expected; -0.2% previously); Initial jobless claims (245,000 expected; 234,000 previously)
- Friday: No major economic data released.

Consumers losing confidence?
Since the election, business and consumer surveys have surged.
This “soft data,” however, is still yet to be backed up by a big run of solid “hard data” — think things like the jobs report, retail sales, and durable goods orders — to indicate that the election ushered in a new era of growth for the US economy.
Certainly, consumer sentiment is important, as consumer spending account for about 70% of GDP. If consumers are feeling good and consumers are spending, the US economy is going to do well.
But on Friday, the preliminary reading on consumer sentiment in February from the University of Michigan didn’t so much show a decline in sentiment as it revealed that the cracks we see in the US politically exist when it comes to how people feel about the economy.
“To be sure, confidence remains quite favorable, with only five higher readings in the past decade,” said Richard Curtin, chief economist for the UMich survey of consumers.

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