One point we want to focus on this week is retail sales. The tax reform bill passed late last year should be affecting paychecks by this point. It will be interesting to see if people are spending these additional funds or saving and paying down debt. It’s still very early but it’s important to look at these data points to try and determine trends, while projecting expectations of spending and consumer activity.
The Fed’s Beige Book will come out this week. This report allows the Federal Reserve board members to speak on what they are thinking and seeing economically. Last week we had very strong earnings. This week we should see a slew of companies reporting which will provide factual data for us to look at and hopefully impact the market in a positive manner.
One thing that goes in to manufacturing that we just discussed is the Beige Book. The Fed is looking at all 12 economic districts which covers the entire country. President Trump is continuing to try and get rid of regulations that hold back production which has an affect on the economy. An example of this is the EPA and Ambient Air Quality standards. The EPA has an Ambient Air Quality standard across the United States where manufacturers are located and that they have to comply with. A problem that the EPA has had is the length and clarity of the permitting process. This has made it difficult for manufactures to deploy capital. Streamlining this permit process should result in positive expectations of manufacturers’ optimism moving forward.
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