TOCK investors may be bracing for further signs this week that the Federal Reserve could increase interest rates sooner rather than later, with retail sales expected to rebound after two straight months of declines.
A pickup in retail sales could show consumers are benefiting from sharply lower oil prices, but analysts say spending in February was likely curbed by unusually harsh weather in parts of the United States.
Friday’s stronger-than-expected jobs report boosted expectations of a US rate increase as soon as June, causing the market to sell off.
In the jobs data released Friday, unemployment dropped to a six-year low of 5.5 per cent last month, within the range the Fed considers to be full employment. A Reuters poll showed many of Wall Street’s biggest banks are more convinced the Fed will raise rates in June.
While a stronger US economy is better for the US stock market in the long run, investors have worried that if the Fed raises rates too soon, it could dampen growth in a slowly-growing economy.
This week brings the preliminary March reading on consumer sentiment from the University of Michigan. Sentiment unexpectedly fell in February from an 11-year high, adding to recent worries about spending.
Apple, which rose 0.2 per cent on Friday after S&P Dow Jones Indices announced the stock would be added to the blue-chip index this month, will remain in focus today when it is expected to unveil the long-awaited Apple Watch.