Today’s Calendar – Post-Trump Reaction and a Monsoon of Data

Mar 1, 2017

The focus for traders this morning will be on the post-speech reaction (more below).  However, there will be a deluge of economic reports released throughout the day.  In the early data, mortgage applications rose 5.8% for the week ending February 24 as purchase apps rose 6.5% and refi apps rose 5.1%.  The trend of weaker applications remains in place, but the weekly data was a positive surprise.  More importantly to the markets, personal income rose 0.4% MoM in January, beating expectations of a 0.3% gain. Taking into account tax payments and inflation, real disposable income fell 0.2% versus the 12-month average of +0.2%.  Personal spending rose just 0.2% MoM but fell 0.3% when adjusted for inflation.  The savings rate ticked up from 5.4% to 5.5%.  The personal spending data is not a great start for the 1Q data and inflation is taking a larger chunk out of real activity.  The January PCE inflation data showed a slightly weaker-than-expected rate of MoM growth, gaining 0.4% MoM versus expectations of 0.5% growth.  At the core level, PCE inflation rose 0.3% MoM bringing the YoY rate of price gains to 1.7%, in line with expectations.

At 9:00 a.m. CT, the ISM Manufacturing index for February will be released and is expected to increase from 56.0 to 56.2.  The January Construction Spending report is expected to show a 0.6% MoM increase after falling 0.2% in December.  At 1:00 p.m, the Fed is scheduled to release its Beige Book report in anticipation of its March 14-15 FOMC meeting.  February’s vehicle sales data will be released throughout the day.  Fedspeakers Kaplan and Brainard will be on the tape today as well.