Last week was a busy one, as the pace of corporate earnings picked up considerably. President Trump spoke at the World Economic Forum in Davos ahead of this week’s State of the Union Address, and we received our first look at how the domestic economy fared in January. For team Tematica, last week meant attending the Inside ETFs 2018 conference in Florida, not a bad thing given the recent cold snap that hit the country. The conference was filled with meetings and conversation ranging from Bitcoin to new ETF investment strategies, more food than one can possibly eat and an insane amount of walking. My feet are only now recovering.

Now let’s tackle the week ahead…

On the Economic Front

Following Friday’s disappointing December quarter GDP print of 2.6%, investors will be taking stock of the state of the economy in the current quarter. As we wrap January and move into February, this means examining the January data that will be coming our way over the next few weeks to corroborate the improving outlook signaled by the January Flash PMI data from IHS Markit. One of the key reports this week will be the January ISM Manufacturing Index, due out on Thursday.

Also on the docket this week, we have the December Personal Income & Spending and Construction reports as well as several looks at job creation in January before Friday’s January Employment Report. Inside the Employment Report, we’ll be looking at wage data, following the recent report that showed little progress in non-supervisory wages year over year in December. Let’s remember too that several states hiked minimum wages in January, and a growing list of companies have more recently announced wage hikes, which should show up in the February Employment Report. We expect some positive year over year comparisons, but we are not expecting the January findings to ignite inflation concerns. We’ll continue to watch the coming data to gauge if wage-related inflation does being to heat up.

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