The Lookout | Week of February 07, 2022

After last week’s strong U.S. jobs report, here’s what our network of investment professionals have their eyes on this week:

Major Market Events:

Wednesday, February 9: US Crude Oil Inventories Announcement

Thursday, February 10: US Core CPI, Initial Jobless Claims

Friday, February 11 : Fed Monetary Policy Report Release

Hunter Frey, Analyst at Catalyst Funds, Rational Funds, and Strategy Shares:

Equity markets will likely remain volatile amid monetary tightening outlook, a highly anticipated earnings season, and directional inflation data.
Though inflationary pressures remain most important to equity performance, last week’s jobless claims declined for a second week as the economic effects of the omicron virus eases off the holiday season’s peak. This provides structural support (and optimism) to the underlying sentiment for equity markets to continue to gradually recover off January lows.
Key inflation data later in the week remain highly anticipated with inflation above 7% expected. The directional force of the late week inflation data remains pivotal to equity performance (and the equity recovery) as a higher than consensus inflation print could indicate a strong hawkish undertone, potentially pushing equity markets back to January lows. On the other hand, any signs of slowing/stagnant inflationary pressures could portray optimism in the current Fed policy guidance, supporting a continued equity recovery.

Simon Lack, SL Advisors, and Portfolio Manager of an energy infrastructure fund.

Thursday’s CPI will provide an important update on inflation. Based on the strength in Friday’s non-farm payroll report, inflation pressures will likely remain elevated.
Several midstream energy companies will report earnings, including Plains GP (Wednesday) and Enbridge (Friday). We expect both companies to report good earnings that will provide further support for the sector’s rally.

Thank you for reading The Lookout. Come back next Monday for more insights on what investors can expect in the markets.