Investing.com - Markets will be keeping abreast of the next round of trade discussions between the U.S. and China in Washington this week, as the two sides race to reach a deal that would avert a tariff increase on Chinese goods by March 1.
Investors will also focus on the release of the minutes from the Federal Reserve's last meeting, due on Wednesday, for further insight into the outlook for monetary policy in the months ahead.
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There is also important U.S. durable goods data to pay attention to as market participants look for further hints on the strength of the economy.
In earnings, there are 46 S&P 500 companies reporting results in the holiday-shortened week ahead, as the earnings season winds down, with Walmart (NYSE:WMT) likely to draw the most attention.
U.S. markets will remain closed on Monday for Washington's Birthday, more widely known as President’s Day.
Elsewhere, in Europe, markets are keeping an eye on flash PMI surveys on manufacturing and service sector activity, which should give further indication of how the region's economy is coping with global trade conflicts and messy Brexit negotiations.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. U.S.-China Trade Talks
U.S. Trade Representative Robert Lighthizer and China’s vice premier and chief trade negotiator, Liu He, will lead the next round of U.S.-China trade talks in Washington this week.
Both sides reported progress in five days of negotiations in Beijing last week, but the White House said much work remains to be done ahead of a March 1 deadline for reaching a deal.
Shortly after meeting with his trade team at his Mar-a-Lago club in Florida on Saturday, President Donald Trump said on Twitter the talks in Beijing were "very productive."
U.S. tariffs on $200 billion in imports from China are set to rise to 25% from 10% if no deal is reached by March 1, but Trump said that he may extend the deadline if the two sides were close a deal.
2. Fed FOMC Meeting Minutes
The Federal Reserve will release minutes of its most recent policy meeting on Wednesday at 2:00PM ET (19:00 GMT).
The U.S. central bank left interest rates on hold at the conclusion of its policy meeting on Jan. 30 and pledged to be patient with further interest rate hikes, dropping its guidance that ‘further gradual’ rate rises will be needed.
It also said it could alter the pace of its balance sheet reduction "in light of economic and financial developments".
Markets will also pay close attention to comments from a handful of Fed officials this week for their views on the economy and how that can affect monetary policy.
Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams (NYSE:WMB), San Francisco Fed President Mary Daly, Philadelphia Fed President Patrick Harker, St. Louis Fed President James Bullard, Fed Vice Chair Richard Clarida and Fed Governor Randal Quarles are all slated to make public comments this week.
After the Fed hiked rates four times in 2018, investors now expect the U.S. central bank to halt its monetary tightening policy this year as risks to the U.S. economy mount.
3. U.S. Durable Goods Orders
The Commerce Department will release data on December durable goods orders at 8:30AM ET (13:30 GMT) Thursday.
The consensus forecast is that the report will show orders for durable goods increased by 0.8% last month. Core orders, which exclude volatile transportation items, are forecast to rise 0.2%.
This week's holiday-shortened calendar also features data on weekly jobless claims, existing home sales, as well as flash manufacturing and services PMI readings. A survey on manufacturing conditions in the Philadelphia area will also be in focus.
4. Walmart Earnings
Walmart is one of the biggest names slated to report fourth-quarter results this week, as the earnings season on Wall Street continues to wind down.
The retail giant is expected to report earnings per share of $1.33 on revenue of $138.81 billion, according to analysts polled by Investing.com, when it reports before the opening bell on Tuesday.
U.S. same-store sales are expected to rise 3.0%.
Other notable companies reporting results this week include, CVS Health (NYSE:CVS), Kraft Heinz (NASDAQ:KHC), Domino's Pizza (OTC:DMZPY), Wendy’s (NASDAQ:WEN), Dropbox (NASDAQ:DBX), Trade Desk (NASDAQ:TTD), Roku (NASDAQ:ROKU), Medtronic (NYSE:MDT), Herbalife (NYSE:HLF), Intelsat (NYSE:I), Baidu (NASDAQ:BIDU), iQIYI (NASDAQ:IQ), and Wayfair (NYSE:W).
5. Flash Euro Zone PMIs
IHS Markit's composite flash Purchasing Managers' Index (PMI) for the euro zone is due at 4:00AM ET (09:00 GMT) on Thursday, amid expectations for a slight decline to 50.8.
The index measures the combined output of both the manufacturing and service sectors and is seen as a good guide to overall economic health.
Ahead of the euro zone PMI's, France and Germany will release their own PMI reports at 3:15AM ET (08:15 GMT) and 3:30AM ET (08:30 GMT) respectively.
In addition to the PMI data, there are also a pair of surveys this week on German business sentiment from both the IFO and ZEW institutes.
The European Central Bank last month acknowledged that growth in the euro zone was likely to be weaker than previously expected, although it stuck to its guidance that it intends to raise interest rates later this year for the first time in a decade.
