The Business News Week Ahead

It will be a high impact week but one that doesn't get rolling until midweek. Wednesday's opener will be the current account deficit which will focus attention once again on the nation's trade deficit and will be followed by existing home sales where the outlook, due to stubbornly low supply, has been uneven. Wednesday afternoon will see the press conference debut of Jerome Powell who will chair an FOMC meeting where a rate hike, given solid economic growth and the risk of inflation, is the universal expectation. Expectations for March employment will start gelling with Thursday's weekly jobless claims where the mid-month sample will match the sample for the monthly report. The week closes with two major reports on Friday: durable goods where rebound strength is the call and new home sales where new supply should boost results.

Wednesday

Current Account Deficit for Fourth Quarter

Consensus Forecast: -$126.8 billion

Consensus Range: -$133.0 to -$120.3 billion

The current account deficit is expected to widen sharply in the fourth quarter, to a consensus $126.8 billion from a $100.6 billion total in the third quarter that was helped by receipts from foreign insurance companies for the hurricanes that swept the quarter. As a percentage of GDP, the current account deficit was 2.1 percent in the third quarter for the best showing since second-quarter 2014.

Existing Home Sales for February

Consensus Forecast, Annualized Rate: 5.420 million

Consensus Range: 5.300 to 5.620 million

Existing home sales have been slowing and any rebound looks to be contained based on pending sales which are down sharply. Supply of resales on the market is very thin and a stubborn and increasing obstacle to sales growth. Econoday's consensus for February is a 5.420 million annualized rate which would be up from January's disappointing 5.380 million.

Federal Funds Target for March 20 & 21 Meeting

Consensus Forecast, Midpoint: 1.625%

Consensus Range: 1.50% to 1.75%

An incremental 25 basis point rate hike is the universal expectation among Econoday's sample for the March FOMC, in what is expected to be the first of three if not four such rate hikes this year. And the focus will be whether to expect a fourth and this will turn on the quarterly FOMC forecasts, which will be updated at the meeting, and also the statement's assessment of inflation and whether it is downgraded, upgraded or held steady. Comments by Jerome Powell, who will be making his first appearance at the quarterly press conference, will also affect the inflation takeaway. The federal funds target is expected to rise to 1.50 percent inside a range of 1.375 and 1.625 percent.

Thursday

Initial Jobless Claims for March 17 week

Consensus Forecast: 225,000

Consensus Range: 220,000 to 230,000

Versus 226,000 in the prior week, initial claims are expected to come in at 225,000 in the March 17 week which is the sample week of the monthly employment report. Claims have been low and consistent with minimal layoffs and strong demand for labor.

PMI Composite for March, Flash

Consensus Forecast: 55.2

Consensus Range: 54.9 to 56.0

PMI Manufacturing

Consensus Forecast: 55.3

Consensus Range: 54.5 to 55.5

PMI Services

Consensus Forecast: 55.7

Consensus Range: 54.8 to 56.0

Continued overall strength is the expectation for March's flash PMIs which are all seen in a tight 55 range. The consensus for the PMI composite is 55.2 with PMI manufacturing  at 55.3 and PMI services at 55.7. February's results showed strength in orders and hints of capacity stress including rising costs.

Index of Leading Economic Indicators for February

Consensus Forecast, Month-to-Month Change: 0.3%

Consensus Range: 0.1% to 0.5%

February's call for the LEI is a 0.3 percent gain which would follow January's outsized 1.0 percent surge. The workweek , consumer expectations and jobless claims look to be positives for February with stock prices and interest rates neutral and with building permits a negative.

Friday

Durable Goods Orders for February

Consensus Forecast, Month-to-Month Change: 1.7%

Consensus Range: 0.7% to 2.7%

Durable Goods Orders, Ex-Transportation

Consensus Forecast: 0.6%

Consensus Range: 0.1% to 1.3%

Durable Goods Orders, Core Capital Goods (Nondefense Ex-Aircraft)

Consensus Forecast: 0.6%

Consensus Range: 0.2% to 1.0%

Orders for durable goods are expected to bounce back 1.7 percent in February following a mostly soft January that included a sharp aircraft-related downswing in the headline rate but also weakness in the ex-transportation and capital goods readings. The consensus for February ex-transportation orders is a solid gain of 0.6 percent with core capital goods also expected to rise 0.6 percent.

New Home Sales for February

Consensus Forecast, Annualized Rate: 620,000

Consensus Range:  600,000 to 660,000

Supply has been moving into the market which should help new home sales for February where the annualized rate is expected to come in at 620,000 vs January's 593,000.  New home sales surged at the end of last year and strength in February could boost confidence for extending strength into this year.